The Centre informed the Lok Sabha on Monday that there is no proposal to date to consider restoring the Old Pension System (OPS) for its employees. It also reiterated that the law does not permit refunding the back-accumulated money of employees to the State government in case of going back to OPS.
“There is no proposal under consideration of the Government of India for the restoration of the old pension scheme in respect of Central Government employees recruited on or after 01.01.2004,” Minister of State in the Finance Ministry Pankaj Chaudhary said in a written reply in Lok Sabha. However, he admitted that Representations have been received from time to time, which include the request for the restoration of the old pension scheme.
He added that a committee has been set up under the chairmanship of the Finance Secretary to look into the issue of pensions under the National Pension System with respect to government employees and to, inter alia, examine whether, in the light of the existing framework and structure of the National Pension System (NPS), as applicable to government employees, any changes therein are warranted.
OPS and NPS
OPS is a defined pension scheme where employees get half of their last drawn salary as a pension. Also, dearness relief (DR) is revised twice a year, similar to dearness allowance (DA) for serving employees. The employee is not required to make any monetary contribution during his service period for pension. This scheme is available to all government officers/employees joining service on or before December 31, 2003, and to army personnel joining even now.
The NPS (National Pension System) is a defined-contribution pension scheme. Here, all government officers/employees are required to contribute 10 per cent of their salary (basic and DA), while up to 14 per cent is contributed by the government. A pension is given on the basis of funds accumulated during the service period. No DR is applicable under the NPS. Barring West Bengal, all States joined the NPS. However, Rajasthan, Jharkhand, Punjab, and Himachal Pradesh announced reverting to OPS.
Chaudhary said that as of March 31, 2023, the total number of Central Government pensioners was around 68 lakh, including defence pensioners. However, there is no data available with the Centre about pensioners in the States. The Minister also said that the State governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh have informed the Central Government/Pension Fund Regulatory and Development Authority (PFRDA) about their decision to revert to the Old Pension Scheme (OPS) for their State government employees.
These State governments have requested the withdrawal or refund of contributions along with their returns. However, the Government of Punjab has also informed the Government of India that it continues to pay staff and government contributions to the NPS.
‘No provision’
“There is no provision under the PFRDA Act, 2013, read along with the PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015, and other relevant Regulations, vide which the accumulated corpus of the subscribers, viz., government contribution and employees’ contribution towards NPS, along with accruals, can be refunded and deposited back to the State governments,” the minister concluded.