OPS Update: Employee unions across the country have long demanded the restoration of the Old Pension Scheme (OPS). The issue has also been repeatedly raised in Parliament, where it is argued that the National Pension System (NPS) exposes employees to market risk. The central government has once again clarified its stance on this issue in the Rajya Sabha.
Central government’s clarification
Minister of State for Finance Pankaj Chaudhary mentioned that the central government currently has around 50.14 lakh employees. However, a large number of pensioners are still receiving pensions under the Old Pension Scheme (OPS). There are about 6.9 million pensioners enrolled in the OPS. In contrast, as of January 31, 2026, there are roughly 49,802 pensioners under the National Pension System (NPS).
Why is there such a big difference?
The reason for this significant difference is that the OPS applied to employees who began their government service before January 1, 2004, while the NPS is designated for those who started after that date. The government has reported no instances of delays in monthly pension payments under the NPS over the last three years. Both the Finance Ministry and the Pension Fund Regulatory and Development Authority (PFRDA) have not received any complaints regarding delays from annuity service providers.
Government’s stand on OPS restoration
The central government has clarified that the choice to restore the OPS lies solely with the state governments, as pension policies for their employees fall under their jurisdiction. Nevertheless, the Comptroller and Auditor General (CAG) has cautioned against the reinstatement of the OPS, indicating that it could heighten the long-term pension liabilities on state finances.
Despite these financial warnings, several states have reverted to the old pension scheme due to pressure from employee unions. These states include Rajasthan, Chhattisgarh, Himachal Pradesh, Punjab, and Jharkhand.
Difference between OPS, NPS and UPS?
Old Pension Scheme (OPS): This was a defined-benefit pension system. Under this scheme, employees received 50% of their last salary plus regular dearness allowance upon retirement. There was no contribution from the employee.
National Pension System (NPS): This is a defined-contribution system. Both the employee and the government contribute to a pension fund, which is market-linked. The final pension depends on the amount deposited and the returns earned.
Unified Pension Scheme (UPS): The government recently introduced the UPS for employees covered under the NPS. It aims to provide more predictable and assured pension benefits while maintaining a contributory system.
