Govt mulling over assured pensions at 40-45% as some states transfer again to OPS

Amid the politics of the Old Pension Scheme vs National Pension Scheme, the Government of India officers on Wednesday mentioned that they’re mulling over some adjustments within the new market-linked pension scheme which can guarantee workers a minimal pension of 40%-45% of their final drawn wage, a report by Reuters mentioned. The officers nonetheless cleared that “we will not go back to the old pension system.”

The improvement comes as many Opposition-ruled states in India have moved again to the Old Pension Scheme (OPS) and a few even some BJP-ruled states have expressed their discomfort with the National Pension Scheme. As the political events began utilizing the pension situation in elections, the federal government arrange a committee in April to assessment the National Pension Scheme.

The assessment comes amid polls in lots of essential states and Lok Sabha elections in 2024. 

With adjustments within the National Pension Scheme and warranted minimal pension of 40%-45%, the federal government is trying to strike a steadiness between politics and economics. The pensions of  authorities workers take away a big chunk of the Union Budget. 

Old Pension Scheme vs National Pension scheme

In the Old Pension Scheme (OPS) framework, the Government of India assured a hard and fast pension of fifty% of an worker’s final drawn wage. Moreover, the staff did not have to contribute something to their pensions throughout their working life.

Citing the heavy fiscal burden on the Union Budget, the federal government launched the National Pension Scheme in 2004 which requires workers to contribute 10% of their fundamental wage and the federal government 14%. The pension will then depend on the returns on the corpus, most of which is invested within the federal debt, the Reuters report defined.

The re-consideration by the federal government of the National Pension scheme is possibly pushed by the issues of presidency workers and want for an additional approach to make sure a fiscally sustainable pension scheme for India.

Rajasthan, Jharkhand, Chhattisgarh, Himachal Pradesh, and Punjab are some states which moved again to OPS.

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Updated: 21 Jun 2023, 06:46 PM IST