A major policy shift: Hence, the program to revive the Old Pension Scheme for select categories of employees in 2025 has now been announced. Most public sector employees and the retired community were extremely jubilant with this announcement, as the OPS confers lifelong pension benefits, while the NPS is market dependent.
What Is the Old Pension Scheme?
OPS is a defined benefit plan whereby an employee is entitled to a fixed guarantee of a monthly pension after retirement that stands at a certain percentage of his/her last drawn salary. Since this scheme does not depend on market fluctuations unlike NPS, it is thus a safe post-retirement income security.
Who Still Qualifies?
The official announcement had stated that only some employees will fall under the restored OPS. Those joining service before a specific cut-off date, along with other categories of central and state government employees, are expected to be beneficiaries. An official list of eligible employees will be issued on a departmental basis.
Why Reintroduce OPS?
Demand for the OPS has been high, as employee unions have stated that the NPS leaves retirees vulnerable to market risks. Therefore, by reintroducing the OPS for selected employees, the government seeks to provide financial security and stability while setting fiscal balances.
Effects on Employees and Pensioners
For the scheme-covered employees, the reintroduction of OPS ensures a guaranteed payment post-retirement without any market performance risk. Pensioners, too, will benefit from inflation-linked dearness relief, assuring steady income growth in correlation with inflation.
Government’s Balancing Act
Return of OPS is good for the employees; however, the government has explicitly stated that only specific categories would be included so that the fiscal weight does not grow larger. Further, a hybrid arrangement may also be adopted for fresh recruits.
Conclusion
A major shift in Indian pension policy has been brought about with the return of the Old Pension Scheme in 2025 for a select category of employees. For those who qualify, this scheme guarantees lifelong financial security upon retirement. Employees are eagerly awaiting the official list to check their names.