8th Pay Commission : Discussion about the Eighth Pay Commission is raging across the country. The central government has already issued its Terms of Reference (ToR). Simultaneously, 2.6 million central government employees have once again intensified their demand for the reinstatement of the Old Pension Scheme (OPS). Employees clearly state that the old pension scheme should be implemented when the Eighth Pay Commission ‘s recommendations are finalized, as a secure income after retirement is a key requirement.
In a letter to the government, the National Council of JCMs (NC-JCM) stated that the reinstatement of the OPS is essential for the 2.6 million employees recruited after January 2004 and included in the NPS. The organization stated that this is a “long-pending and justifiable demand, which is related to the security and dignity of employees after retirement.”
Now the question is what is the Old Pension Scheme, the demand for its restoration has increased.
What is Old Pension Scheme?
Under the OPS (Old Pension Scheme), government employees receive a full monthly pension after retirement. This pension is up to 50% of the employee’s last salary. It also includes a dearness allowance, which increases every six months. This scheme is entirely government-funded, meaning employees do not have to contribute from their salary. The entire amount is provided by the government. The pension is paid for life, and after the employee’s death, the spouse also receives a family pension. This is completely guaranteed and secure.
The Old Pension Scheme (OPS) was in place since the British era. It continued after independence and was applicable to all government employees until January 1, 2004. The New Pension Scheme (NPS) was introduced on January 1, 2004, thus discontinuing the OPS.
Why has the demand for OPS restoration increased?
Employees say that pensions under the National Pension Scheme (NPS) are market-dependent, making post-retirement income uncertain. Many employees receive significantly less pension upon retirement than expected. This has led to a rapid increase in demand for the OPS.
The NC-JCM argues that government employees serve for 30-35 years, and therefore, they are entitled to a stable and respectable pension. The organization also stated that several states, such as Rajasthan, Himachal Pradesh, Punjab, and Chhattisgarh, have already reinstated the OPS, so the central government should also take the initiative.
What is the National Pension Scheme?
The National Pension Scheme (NPS) is a new pension system launched in 2004. It deducts 10% of an employee’s salary each month, and the government contributes 10-14%. This money is invested in the stock market, bonds, and government securities. Upon retirement, 60% is received in a lump sum, and the remaining 40% is used to purchase an annuity to generate a monthly pension. The pension amount depends on market fluctuations, so it is not completely guaranteed. The employee bears the risk.
What is the relation of OPS with the Eighth Pay Commission?
Employees’ organizations argue that pension reforms should also be implemented while the government is considering the 8th Pay Commission. They believe that restoring the OPS would provide future financial security to millions of employees.
