No Proposal to Restore Old Pension Scheme for Central Government Employees
The Government of India has confirmed that there is currently no proposal to restore the Old Pension Scheme (OPS) for Central Government employees under the National Pension System (NPS). The transition from OPS was due to concerns over fiscal sustainability. The NPS, which is a defined contribution scheme, applies to Central Government employees (excluding armed forces) who joined after January 1, 2004.
To enhance pension benefits, the government established a committee led by the then Finance Secretary to explore modifications to the NPS. The result is the introduction of the Unified Pension Scheme (UPS) as an option within the NPS, aiming to provide defined retirement benefits.
The UPS includes features designed for fiscal sustainability while ensuring assured payouts. Employees opting for UPS can also avail benefits under the CCS (Pension) Rules, 2021 or the CCS (Extraordinary Pension) Rules, 2023, particularly in cases of death during service or discharge due to invalidation or disablement.
Effective January 24, 2025, the UPS allows for an assured payout of 50% of the average of the last twelve monthly basic pays after a minimum of 25 years of qualifying service. For those with shorter service periods, a proportionate payout will be provided.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
STARRED QUESTION NO. *308
ANSWERED ON MONDAY, 11 AUGUST, 2025/ SRAVANA 20, 1947 (SAKA)
RESTORATION OF OLD PENSION SCHEME
308. SHRI SUDAMA PRASAD
SHRI UTKARSH VERMA MADHUR
Will the Minister of FINANCE be pleased to state:
(a) whether the Government proposes to restore the Old Pension Scheme (OPS), if so, the details thereof and if not, the reasons therefor along with the reasons for introducing UPS;
(b) whether the Government is aware about the non-feasibility of the New Pension Scheme and if so, the details thereof;
(c) the reasons for excluding unemployed son, unmarried/widowed/divorced daughter and dependent parents from the definition of family in UPS; and
(d) the reasons for the reduced pension in UPS as compared to OPS and the declaration of UPS only through a Press release?
ANSWER
THE MINISTER OF FINANCE
(SMT. NIRMALA SITHARAMAN)
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