Indian Central Govt Employees Get One Time Option To Join Old Pension Scheme!

The Indian Central Government has provided a one-time option to a select group of its employees to opt for the Old Pension Scheme. This new provision is for those employees who joined government services before December 22, 2003. They can now join the Central Civil Services (Pension) Rules, 1972 (now 2021). The government has extended the option for eligible government employees till August 31, 2023. Once the option is exercised, it will be treated as final. The government took this decision after several representations and court rulings regarding the issue. The National Movement for Old Pension Scheme (NMOPS), an organization with more than 14 lakh central and state government employees, has welcomed the government’s decision.

What is OPS and NPS?

Employees get a defined pension under the Old Pension Scheme (OPS). An employee is entitled to receive 50% of the last pay drawn as pension. OPS was discontinued by the government in 2003, and the New Pension Scheme (NPS) was introduced. Employees contribute 10% of their basic pay to the pension, while the government contributes 14%.

One-Time Option for Eligible Employees

The government has allowed eligible employees to join the Old Pension Scheme till August 31, 2023. Employees who do not opt for this scheme will continue to be covered under the National Pension System. The decision has been taken after consultation with Department of Financial Services, Department of Personnel and Training, Department of Expenditure and Department of Legal Affairs. The matter relating to coverage under the CCS (Pension) Rules, 1972 (now 2021), will be placed before the Appointing Authority on the basis of the option exercised by the Government servant. If the Government servant fulfills the conditions of coverage under the CCS (Pension) Rules, 1972 (now 2021), necessary orders in this regard will be issued by October 31, 2023.

Applicable to CAPF personnel

The order will apply to Central Armed Police Forces (CAPF) personnel and other central government employees who joined the services in 2004, as the recruitment process was delayed due to administrative reasons. The employee’s contribution to NPS will be credited to the General Provident Fund (GPF) of the individual.

Reason for Decision

The government took this decision to address the huge volume of litigations facing it on this issue. Hundreds of cases were going on in courts across the country, and the government could not win a single case. Individual officers were getting benefit from the orders of the court. In order to issue general instructions for the benefit of all eligible officers, the Department of Pension and Pensioners’ Welfare (DPPW) held wide consultations.

Opposing the Decision

The Bharatiya Janata Party-led government has said that restoring the old system would put unnecessary financial burden on the government. Several opposition-ruled states such as Chhattisgarh, Rajasthan, Jharkhand and Himachal Pradesh have announced that they will reinstate OPS. As on January 31, there were 23,65,693 central government employees and 60,32,768 state government employees enrolled under the NPS. All the states except West Bengal have implemented NPS.

Overall, the one-time option for select Central Government employees to migrate to the Old Pension Scheme (OPS) is a welcome step, after considering the representations/references and court judgments in this regard. It provides an opportunity to eligible government employees to choose between the old pension scheme and the National Pension System (NPS) based on their individual preferences and requirements.