Old Pension Scheme: Have you heard about the Old Pension Scheme (OPS). This is the scheme that made the retirement life of government employees secure.
But it was permanently discontinued a few years ago. Now once again there is a stir across the country regarding the old pension scheme. Let us know about this scheme in detail.
What is the Old Pension Scheme
The Old Pension Scheme (OPS) was a pension scheme in which government employees used to get about half of their last salary as pension after retirement. In this, dearness allowance (DA) also kept increasing.
What is the New Pension Scheme (NPS)
The New Pension Scheme (NPS) was implemented from the year 2004 in place of OPS. In this, both the employee and the government contribute a fixed amount.
After retirement, this money goes to a pension fund, and the pension is received from the returns received from it.
Why the demand for the withdrawal of OPS
Many government employees consider OPS to be better than NPS. He says that pension is guaranteed in OPS, while there is market risk in NPS.
Apart from this, the pension amount in OPS is linked to the last salary, while in NPS pension is given based on contribution.
Will OPS return or not
At present, the central government has not made any official announcement about bringing back OPS. But, many states have started considering it. If OPS returns, it will benefit lakhs of government employees.
Status of old pension scheme in states
Some states have decided to bring back the old pension scheme, while in some states it is still being considered.
An Advantages and the disadvantages of the old pension scheme
Advantages
Guarantee of fixed pension
Increase in dearness allowance
Disadvantages
Higher financial burden on the government
Limited investment options
Return of OPS: Challenges
Despite the demand to bring back OPS, the government faces many challenges:
Financial burden: Implementation of OPS can put a heavy financial burden on the government.
Judicial Hurdles: The Supreme Court has dismissed petitions challenging NPS.
Middle-generation opposition: New-generation employees may prefer NPS.