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HomeNewsThis Congress-ruled state to implement 'Old Pension Scheme' for govt employees

This Congress-ruled state to implement ‘Old Pension Scheme’ for govt employees


Congress party-ruled Himachal Pradesh has decided to implement the Old Pension Scheme (OPS) for its employees. The Himachal Pradesh cabinet said the move would benefit 1.36 lakh employees.

However, the state government has also kept the provision of the New pension scheme (NPS) active. The state cabinet has asked the employees to give their consent to the government if they want to be governed under the new rule of pension.

In the meeting presided over by CM Sukhvinder Singh Sukhu, the cabinet said that the employees will also be brought under the ambit of GPF, and those employees under the New Pension Scheme (NPS), who have retired after 15 May 2003, will be given OPS from the prospective date, an official Himachal Pradesh government statement said.

It stated that post the necessary amendments in the rules, the contribution by the government and the employees under NPS will stop from April 1, 2023, implying no deductions will be made from their salary under NPS from April 1, 2023.

The Himachal Pradesh cabinet said it will spend an additional amount of 1,000 crores in fiscal 2023-24 on the implementation of OPS, asking the finance department to amend the rules and issue the necessary instructions in this regard.

Moreover, the cabinet has also passed a resolution to be sent to the Union Government to return an amount of 8,000 crores under the NPS, to the state.

In addition to this, the Centre has also given a one-time opportunity to select government staff to shift from NPS to OPS by 31 August 2023.

In the latest circular by the Ministry of Personnel, the employees who joined the central government services against posts advertised or notified before December 22, 2003, the day National Pension System (NPS) was notified, are eligible to join the old pension scheme under the Central Civil Services (Pension) Rules, 1972 (now 2021).

The ministry said that the NPS account of such government servants shall, consequently, be closed with effect from December 31, 2023.

What are OPS and NPS:

In the OPS, upon retirement, employees receive 50% of their last drawn basic pay plus dearness allowance or their average earnings in the last ten months of service, whichever is more advantageous to them. An employee should be in service for ten-year service to avail of the benefit.

Under OPS, employees are not required to contribute to their pensions. An incentive for taking on government employment was the guarantee of a pension post-retirement and a family pension. OPS has become unsustainable for governments due to rises in life expectancy.

New pension scheme (NPS)

In this NPS, those employed by the government contribute 10% of their basic salary to NPS, while their employers contribute up to 14%. Private sector employees can also participate in the NPS voluntarily.

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