Reemployed Exservicemen May Revert Back to Old Pension Soon : Hope of Rays

The NPS (National Pension System) to OPS (Old Pension Scheme) movement in India refers to the demand by certain sections of government employees to switch from the NPS to the OPS. The OPS is a defined benefit pension scheme that was in place for government employees prior to the introduction of the NPS in 2004.

The NPS is a defined contribution pension scheme that was introduced for government employees in 2004. Under the NPS, employees make regular contributions to their pension account, and the amount of pension they receive upon retirement depends on the performance of the investments made with these contributions. The NPS is mandatory for all new government employees who joined after January 1, 2004, while older employees have the option to switch to the NPS.

However, after experiencing the ground reality it has been found that the amount of pension awarded through NPS is one fourteenth of OPS for the same length of service rendered in a govt department. in 2022 a UDC retired with 18 years of service under NPS Scheme getting Pension only Rs 2,500/- pm. Whereas another employee who joined in December 2003, rendered only 18 years one month service in the same designation and at the same department, drawing a pension for Rs 35,000/- pm. So, the government employees from stat/central govt department, have been demanding the option to switch from the NPS to the OPS. They argue that the NPS is a risky investment and does not provide the same level of security as the OPS. They also point out that the OPS provides a higher level of pension benefits and is more beneficial for employees in the long run.

The Indian government has been considering the demand to switch from the NPS to the OPS, and there have been some developments in this regard. In 2022-23, some court cases from higher courts ordered that the option to switch from the NPS to the OPS should be made available to all government employees, regardless of when they joined the service. The government is currently working on the modalities of implementing this decision. In some states, the switchover to OPS has been implemented. Himachal Govt has published notification to cease collecting NPS contribution for the Govt employees from 1st April 2023.

Govt of India has already formed a committee to study the various aspects of NPS as various trade unions have already approached the govt authority to scrap NPS and back to OPS. It may be expected that, like Himachal Pradesh and few other states, Central Govt employees also will get back the Old pension scheme from 2004. Lakhs of reemployed exservicemen who are reemployed kin various Central Govt Dept including audit and accounts, income tax, railway and various ministry/department will also get benefitted with restoration of OPS from 2004.

Overall, the NPS to OPS movement in India reflects the concerns of a large sector of government employees about the security and benefits of their pension scheme, and the government is taking steps to address these concerns.

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