The Chandigarh administration has allowed eligible central government employees covered under the National Pension System (NPS) to transition back to the Old Pension Scheme (OPS) under the Central Civil Services (Pension) Rules, 1972.
The step has been taken in accordance with an earlier office memorandum issued by the Ministry of Personnel, Public Grievances and Pensions, on March 3, 2023. According to the memorandum, those central government civil employees who have been appointed to a post or vacancy advertised or notified before December 22, 2003, but who joined service on or after January 1, 2004, after the implementation of the NPS, may be given a one-time option to be covered under the CCS Rules 1972 (now 2021).
The Chandigarh administration has said that the transition process will involve identifying eligible employees, verifying their service details, and completing all necessary formalities, according to a report by The Indian Express. This process would be finalised by August 15, 2025, ensuring a smooth shift to the OPS.
OPS Vs NPS
While NPS offers the possibility of a higher retirement corpus at superannuation, it does not guarantee a pension amount. This is one of the reasons why government employees have been demanding they be reinstated under OPS, as it provides a guaranteed pension.
Another benefit of OPS is that it is not contributory. It means that employees covered under the OPS do not need to contribute towards a pension. It is unlike the NPS and the recently launched Unified Pension Scheme (UPS) which are contributory pension schemes.
OPS offers a guaranteed pension of 50 per cent of the last salary drawn, along with the dearness relief announced by the government from time to time. Whereas NPS offers a mandatory annuity of 40 per cent at superannuation out of the accumulated corpus, and with the option to withdraw the remaining balance in a lump sum.
The basic difference, which can’t exactly be measured, is ‘uncertainty’. The choice between a certainty of a fixed pension and the chances of a higher pension is what makes risk-averse employees inclined towards OPS, or the new addition—UPS. But UPS is also a contributory pension scheme, which makes it less appealing than the OPS.
However, due to OPS’s non-contributory nature, experts consider it a burden on public funds. Besides, it may not be sustainable, considering the increasing number of pensioners. According to the government, the number of pensioners (over six million) at present exceeds the number of serving employees. Despite this, some of the states, including Rajasthan, Chhattisgarh, and Himachal Pradesh have reinstated OPS.
