The Old Pension Scheme (OPS) was a reliable source of financial stability for government employees in India. It guaranteed a fixed post-retirement income. However, in 2004, the government replaced OPS with the National Pension System (NPS), a market-linked scheme. This shift created uncertainty and dissatisfaction among employees.
Now, in a major policy shift, the government has announced the revival of OPS starting from 15 May 2025. This move aims to offer financial security and peace of mind to eligible government employees nearing retirement.
Restoration and Eligibility Details
The OPS will be made available to the following groups:
| Eligible Category | Conditions |
|---|---|
| Central Government Employees | Joined service before 1 April 2004 but were incorrectly placed under NPS |
| Defence Personnel | Must apply before 31 July 2025 |
| Railway Employees | Must apply before 31 July 2025 |
| Central Autonomous Body Staff | Must apply before 31 July 2025 |
Eligible employees must opt in before 31 July 2025 to receive OPS benefits.
OPS vs NPS: Key Differences
| Feature | Old Pension Scheme (OPS) | National Pension System (NPS) |
|---|---|---|
| Nature | Defined benefit | Defined contribution |
| Contributions | No employee contribution | Both employer and employee contribute |
| Pension Amount | 50% of last drawn salary + Dearness Relief | Based on market returns |
| Risk | Zero (government-backed) | Market-linked (variable returns) |
OPS offers a predictable and inflation-protected pension. In contrast, NPS depends on market performance, which may result in variable post-retirement income.
OPS Implementation in States
Several states have already reinstated OPS for their employees. Examples include:
- Rajasthan
- Chhattisgarh
- Punjab
With the central government taking this step, more states may follow suit, expanding the scope of OPS across India.
Conclusion
The return of the Old Pension Scheme marks a major shift in the government’s approach to employee welfare. With its focus on providing assured income and stability, OPS is set to bring relief to millions of eligible government staff across departments.
FAQs
Who is eligible for the restored Old Pension Scheme?
Employees who joined before 1 April 2004 but were wrongly put under NPS, as well as certain defence, railway, and autonomous body personnel.
What is the last date to opt into OPS?
31 July 2025.
Does OPS require employee contributions?
No, OPS does not require any contribution from the employee.
Will states also follow this move?
Some already have; others may consider it following the central decision.
What are the main benefits of OPS over NPS?
OPS offers a fixed pension with inflation protection, while NPS returns are market-dependent.