OPS: The Central Government has clarified its position on the restoration of the Old Pension Scheme (OPS) for government employees, stating that there is currently no proposal under consideration to bring back the scheme. The clarification was provided by the Ministry of Finance in a written reply to Lok Sabha Unstarred Question No. 3637, answered on August 10, 2026. The question was raised by Dr. Indra Hang Subba, who sought details regarding the government’s plans to implement the Old Pension Scheme, the reasons behind its decision, and the status of pension funds accumulated by states that have decided to move away from the National Pension System (NPS).
Old Pension Scheme Update
In its response, the Ministry of Finance stated that the restoration of OPS is not being considered by the Government of India because it could create an unsustainable fiscal liability for the government exchequer. This clarification is significant for central government employees and pensioners who have been demanding the restoration of the Old Pension Scheme, which provides a defined pension based on the employee’s salary and qualifying service. The government’s response indicates that there is no immediate plan to reverse the existing pension framework for central government employees.
The Old Pension Scheme has remained a major issue among government employees, particularly those recruited after the introduction of the National Pension System. Under OPS, eligible retired employees receive a defined pension, generally calculated according to their last drawn salary and qualifying service, subject to the applicable rules. In contrast, the NPS is a contribution-based pension system in which contributions from employees and the government are invested to build a retirement corpus. The final retirement benefits depend on the accumulated contributions, investment performance and the applicable withdrawal and annuity rules.
The government also addressed questions concerning the pension funds accumulated by states that have implemented or announced decisions relating to the Old Pension Scheme. According to the reply, the concerned state governments provided information about their pension-related funds deposited with the Pension Fund Regulatory and Development Authority (PFRDA) under the National Pension System and the Unified Pension Scheme (UPS), along with the amounts involved.
The figures presented in the Lok Sabha reply showed that Rajasthan had accumulated pension funds worth ₹53,403.89 crore, while Chhattisgarh had ₹24,030.04 crore. Jharkhand reported ₹14,420.90 crore, Punjab had ₹40,673.08 crore, and Himachal Pradesh had ₹12,525.96 crore. These figures highlight the substantial amounts accumulated under the contributory pension framework in the states mentioned in the parliamentary response.
Another important clarification concerned whether the pension contributions accumulated under the NPS could be returned to states that had decided to exit the scheme. The Ministry of Finance referred to the Pension Fund Regulatory and Development Authority Act, 2013, along with the National Pension System (Exit and Withdrawals under NPS) Regulations, 2015, and other relevant regulations. According to the reply, there is no provision under the existing framework for returning the accumulated pension corpus of subscribers, including the government’s contribution, to the state government.
The government explained that these accumulated funds are intended to provide retirement benefits to subscribers under the applicable pension rules. Consequently, a state’s decision to move away from the NPS does not automatically mean that the pension contributions already accumulated under the scheme can be transferred back to the state government. The treatment of these funds remains governed by the relevant legislation and pension regulations.
For government employees awaiting a decision on the restoration of OPS, the latest parliamentary reply provides an important update on the Centre’s position. The government has clearly stated that it is not considering the restoration of the Old Pension Scheme at present, citing concerns over the potential financial burden on public finances. At the same time, the response addresses the continuing debate over the pension funds accumulated by states that have sought changes to their existing pension arrangements.
However, the reply should not be interpreted as a blanket statement about every state’s pension policy or the separate decisions taken by individual state governments. Pension arrangements, implementation decisions and related benefits may differ between states and the Centre. Employees should therefore refer to the official notifications issued by their respective governments for details about their eligibility and applicable pension rules.
For now, the Centre’s response makes one point clear: there is no proposal under consideration to restore the Old Pension Scheme for central government employees, and the accumulated funds under the NPS cannot simply be returned to states outside the provisions of the existing legal and regulatory framework.