OPS vs NPS: In view of the demand for the Old Pension Scheme, the Central Government had announced the formation of a committee under the chairmanship of the Finance Secretary amid growing opposition to the National Pension Scheme.
Minimum Pension Assurance: Amid increasing demand for the old pension scheme, the central government may decide to provide minimum pension to its employees. The central government can assure the minimum pension of 40 to 45 percent of the last drawn salary of the employees. This news has come to the fore by quoting Reuters.
In view of the demand for the old pension scheme, the Central Government had announced the formation of a committee under the chairmanship of the Finance Secretary, amid growing opposition to the National Pension Scheme, which is considering making NPS attractive. It is believed that the Central Government can make changes in the existing Market Linked Pension Scheme to the employees so that the resentment among the central employees regarding NPS can be reduced.
Many Congress-ruled states are implementing the Old Pension Scheme by abolishing the NPS in their states, due to which a tussle has also been seen between the central and state governments. After which the Modi government had to take a decision to review the existing pension scheme.
Looking at the terms of reference of the committee, they are considering whether there is a need to make changes in the framework and structure of the existing National Pension System. If the committee feels the need for changes, then what changes can be made so that the pension of government employees can be improved in the National Pension Scheme
In the current NPS, employees have to contribute 10% of the basic salary and 14% is contributed by the government. And the returns depend on the market returns on the total corpus that is invested in government debt. In the old pension scheme, the employee gets a fixed pension of 50 percent on the last salary before retirement.
There is a tussle between the Center and the states ruled by the opposition parties regarding the National Pension Scheme. These days, the employees of the state government including the central government are protesting against the National Pension Scheme and are demanding to restore the old pension scheme. Controversy is also increasing because the old pension scheme was reinstated in Congress ruled states like Himachal Pradesh, Rajasthan, Chhattisgarh. After which the pressure on the government to review NPS increased.
