OPS: The old pension scheme is based on the last pay drawn by the employee. Whereas NPS is known as Contributory Pension System. Under OPS, the employee can withdraw 50 percent of the last drawn pay as pension after retirement.
Pension: There is a lot of uproar in the country regarding the old pension scheme. The old pension scheme has been re-implemented by many state governments. Meanwhile, the Himachal Pradesh government has finally gone back to the Old Pension Scheme (OPS) instead of the National Pension Scheme (NPS) from April 1. The Congress party had promised to go back to OPS in the 2022 assembly elections.
Old pension scheme
A notification in this regard has already been issued recently through Himachal Pradesh Chief Secretary Prabodh Saxena. According to the notification “In view of the cabinet decision for implementation of the old pension scheme under the CCS (Pension) Rules 1972, the State Government has decided that the State Government employees (employee and employer share) covered under the National Pension System The contribution will be stopped from 1st April, 2023.”
Pension
This move will benefit both retired and serving employees and employees with more than 20 years of service will be entitled to pension of 50 per cent of basic pay and DA. At the same time, this step is likely to put a burden of Rs 1000 crore on the exchequer. Earlier this year, after the Himachal Pradesh government decided to restore OPS, Chief Minister Sukhwinder Singh Sukhu said after a cabinet meeting, “The aim of the government is to provide social security to all. We have decided to implement OPS from the point of view of social security and humanity. The affordability of OPS expenditure will be achieved through financial discipline and reduction in expenses and we believe that there is nothing that cannot be done.”
New Pension Scheme Vs Old Pension Scheme
Explain that the old pension scheme is based on the last salary earned by the employee. Whereas NPS is known as Contributory Pension System. Under OPS, the employee can withdraw 50 percent of the last drawn pay as pension after retirement. And under NPS, a person is allowed to withdraw 60 percent of the corpus accumulated during his working years at the time of retirement, which is tax-free. The remaining 40 percent is converted into an annuity product, which can currently provide a pension of 35 percent of the person’s last salary.
