OPS Latest News: The recent update on the old pension scheme (Old Pension Scheme or OPS) brings about good news for government employees as well as pensioners. The scheme, which was replaced by the New Pension Scheme (NPS) in 2004, has again captured the news headlines. Several state governments, along with employee unions, are demanding the reinstatement of OPS. Let’s find out about the new update that has occurred in detail.
What Is Old Pension Scheme (OPS)?
The Old Pension Scheme (OPS) was a defined benefit scheme where government employees were paid pensions based upon their last salary upon retirement. In this scheme, the employees were guaranteed pensions, which were adjusted with inflation. In 2004, this OPS was replaced with the New Pension Scheme (NPS), which is a defined contribution scheme.
What Is The New update?
Many state governments have decided recently to reinstate OPS. States like Rajasthan, Chhattisgarh, and Jharkhand have already revived OPS. Now, other states are also in line with this. The center is also looking into the demand and may reinstate the OPS by 2025.
Benefits Of OPS
- Guaranteed pension: Under OPS, employees are provided a guaranteed pension after retirement, which is determined with reference to their last drawn salary.
- Dearness Allowance (DA): The pensions in OPS are variable with inflation and thus allow protection of the purchasing power of pensioners.
- Security and stability: OPS ensures financial security and stability to employees, which is missing in NPS.
Demand To Re-implement OPS
Employee unions and government workers pushing for the reintroduction of the OPS argue that the NPS does not guarantee a pension, as it is highly uncertain and subjected to market performance. The argument most popularly stated says pension from NPS is way less than that one offered from OPS.
The demand to revive the Old Pension Scheme (OPS) is on the rise, and several state governments are taking steps in this direction. An assurance of the financial security and stability of this scheme with government employees and pensioners will be a big relief if the central government reintroduces OPS for lakhs of employees. But, in consideration of doing so, the government will have to assess its financial ramifications. Meanwhile, employees and pensioners are just waiting for the change.
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