Government employees and officials from various states have been demanding the revival of the Old Pension Scheme (OPS) for a long time. Acknowledging the demands of government employees, OPS has been reinstated in Himachal Pradesh, Chhattisgarh, Punjab, Rajasthan, and Jharkhand. Despite this, the central government had refused to reinstate it. Nevertheless, millions of employees remain steadfast in their demands.
Employee unions argue that under the NPS, there are no fixed benefits post-retirement compared to the fixed pension provided under OPS. Therefore, the government is endeavoring to assure central employees under NPS that they will receive benefits similar to OPS after retirement. The government is making efforts to ensure that employees retiring under the NPS receive 50% of their monthly salary as pension.
Retirement Pension Concerns
Employees are concerned about whether they will receive adequate amount after retirement. However, those recruited after 2004 are currently receiving good returns under the ongoing scheme. It is crucial for employees to have maintained their savings without any withdrawals for 25-30 years. In this regard, Finance Minister Nirmala Sitharaman announced the formation of a committee chaired by Finance Secretary T V Somanathan to address these issues.
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New Pension Scheme
The decision not to revert to the OPS has been made by the central government. However, the government had kept a window open for a specified level of assistance when it announced its intention to amend the decision of the Congress-led Manmohan Singh government. Under the Old Pension Scheme (OPS), retirees receive half of their last salary as pension every month. This pension also sees periodic increases based on the recommendations of the Pay Commission. In contrast, under the NPS, government employees contribute 10% of their basic salary, with the government adding a 14% contribution.
50% Pension Guarantee
The Somanathan Committee has studied schemes from countries worldwide and changes implemented by the Andhra Pradesh government. Additionally, the committee is also examining the impact if the government guarantees a fixed amount of retirement money. The study clearly indicates that it is feasible for the central government to guarantee 40-45% pension. However, concerns remain among employees who have worked for 25-30 years. Hence, the government is now considering guaranteeing 50% of the pension amount.
