On November 17, 2024, around 5,000 government employees staged a protest at Jantar Mantar in Delhi, demanding the reinstatement of the Old Pension Scheme (OPS). The demonstrators voiced their dissatisfaction with the New Pension Scheme (NPS), rallying under the banner of the All India NPS Employees Federation (AINPSEF).
Understanding the Old Pension Scheme (OPS)
The Old Pension Scheme (OPS) provided retired employees with financial stability by ensuring they received 50% of their last drawn salary as a pension. This framework offered lifelong support to retired personnel, enabling them to lead a secure post-retirement life.
In 2004, the government replaced OPS with the New Pension Scheme (NPS), a contributory model where both the employee and the employer make payments into a pension fund. Currently, over 60 lakh government employees are enrolled under NPS, with the exception of armed forces personnel, who continue under an OPS-like system.
| Feature | Old Pension Scheme (OPS) | New Pension Scheme (NPS) |
|---|---|---|
| Pension Model | Defined benefit (50% of last salary) | Contributory (employee + employer) |
| Stability | Guaranteed lifelong pension | Linked to market performance |
| Applicability | Employees before 2004 | Employees post-2004 |
The Jantar Mantar Protest
The protest attracted employees from the central, state, and Union Territories, united in their demand for the government to restore OPS. Organized by the AINPSEF, representing over 5 lakh employees, the demonstration highlighted widespread discontent with NPS.
Union leaders made an appeal to Prime Minister Narendra Modi, arguing that reinstating OPS would not only secure retirees’ futures but also foster trust between the government and its workforce. They warned that failure to address these concerns could escalate protests nationwide.
Unified Pension Scheme (UPS): A Possible Alternative
In response to the demands, the government introduced the idea of a Unified Pension Scheme (UPS), set to commence on April 1, 2025. UPS, while retaining some features of NPS, aims to provide pension assurances akin to OPS. Employees will have the option to choose between UPS and NPS, potentially offering a middle ground to address employees’ grievances.
Key Features of UPS:
- Hybrid structure combining contributory and guaranteed benefits.
- Vertical investment model similar to OPS.
- Employee choice to opt between UPS and NPS.
Future Prospects
As of now, the government has ruled out a rollback of NPS. However, with increasing protests and growing support for OPS, the pressure on the government is mounting. The situation remains dynamic, and the government’s response will shape the outcome of this escalating debate.
FAQs
What is the Old Pension Scheme (OPS)?
OPS was a retirement scheme offering government employees a fixed pension of 50% of their last drawn salary, ensuring financial stability post-retirement.
How does the New Pension Scheme (NPS) differ from OPS?
NPS is a contributory system where both employees and employers fund the pension, with payouts depending on market performance, unlike OPS, which provided a guaranteed amount.
What is the Unified Pension Scheme (UPS)?
UPS is a proposed hybrid pension model that combines features of NPS and OPS, offering employees a choice between the two systems.
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