Great news for government employees in Himachal Pradesh! There’s an update on the old pension scheme. The Sukhwinder Singh Sukhu-led government has announced that the Old Pension Scheme (OPS) will be implemented for state employees.
The Himachal government has stated that those not yet included in this scheme will soon receive its benefits. Additionally, the OPS will also extend to employees of the electricity board, as promised. Discussions are ongoing at various levels regarding this matter. The government has already provided OPS benefits to HRTC employees.
During the budget session of the Himachal Vidhan Sabha, MLA Satpal Singh Satti raised a question about OPS. In response, Deputy Chief Minister Mukesh Agnihotri mentioned that the Congress party was the first to guarantee OPS, and employees have started receiving its benefits. So far, 117,521 employees have chosen OPS, while only 1,356 have opted for NPS.
Regarding NPS, the Deputy CM pointed out that there is a pending amount of Rs 9,242 crore with the central government. Of this, about Rs 5,000 crore belongs to Himachal, which the state is actively seeking to recover. In the NPS, both the government and employees contributed equally, so the opposition leader should reconsider his stance and advocate for the return of Himachal’s funds. Once the state’s share is deposited into the state fund, employees will be eligible for pension benefits. As soon as those who switched to NPS contribute to the state fund, their pensions will be released.
Understand the distinctions between OPS and NPS
1. Under OPS, when a government employee retires, they receive a pension for life that amounts to half of their last basic salary plus dearness allowance, funded by the government.
2. In contrast, NPS requires government employees to contribute 10% of their basic salary to their pension, while the state government contributes 14%.
3. OPS provides for a dearness allowance that is adjusted twice a year. Additionally, if a pensioner passes away, their family is entitled to receive a pension under OPS.
4. Employees under OPS can receive gratuity of up to Rs 20 lakh upon retirement, whereas NPS does not guarantee gratuity at retirement.
5. The New Pension Scheme (NPS) does not apply the Dearness Allowance (DA) that is typically received every six months, while OPS does.
6. After the Pension Commission’s implementation, retired employees benefit from a revised pension.
7. NPS does not guarantee a fixed pension after retirement, as it is linked to the stock market and does not include dearness allowance.
8. NPS includes a provision that allows for 50% of the total salary to be paid as a pension to the employee’s family if they pass away while in service.
9. Unlike OPS, any funds received upon retirement from the NPS, which are influenced by stock market performance, are subject to taxation.
10. In OPS, retirees are not required to pay income tax on the interest accrued from their GPF.