NEW DELHI: If you were one among the few central government employees who have been seeking the reimplementation of the Old Pension Scheme (OPS) replaced by the market-linked New Pension Scheme (NPS) you are out of luck. The NPS has been applicable for all central government staff who had joined service on or after January 1, 2004.
According to an official note from the Union Ministry of Finance last week, the Centre said that scrapping the NPS and reimplementing the OPS for a particular section of people was not feasible. However, the government attempted to assure those asking for the OPS by stating that the NPS scheme would provide a comparable and decent replacement rate vis-a-vis OPS.
“With a growing corpus, prudent investment norms and recent measures of the Government to streamline the NPS, it is expected that NPS would provide a comparable and decent replacement rate vis-a-vis Old Pension Scheme,” the statement said. The response comes after a section of central government employees who had joined service after January 1, 2004, the cut off date for the NPS, sought the implementation of the OPS for them too.
The ministry went on to point out that both the NPS and OPS are different in nature, structure, and benefit, and hence, may not be compared. The OPS is a defined pension initiativeof the Government of India while the NPS is a contributory pension scheme without any defined benefits.
Under the NPS, these benefits depend on factors such as the contribution, entry age, period of subscription, type of investment pattern opted by the subscriber, investment income accrued, percentage of total corpus utilized for pension, etc.
Over half of NPS subscribers are Government staff
As on December 31, 2020, there are 13.99 million subscribers and over Rs 5,34,188 crore of assets under management under the NPS. Government employees, including both Central and state, account for more than half of the subscriber base and nearly 85 per cent of the AUM.