Union Budget 2024-25: The central government started NPS for its employees from January 1, 2004. But, the Employees Union is demanding to restart the Old Pension System (OPS). They fear that the pension will be reduced in the new pension system.
Union Budget 2024-25: Central government employees coming under the National Pension System (NPS) can get 50 percent of the last salary as pension. The Times of India report said that the government is trying to allay the concerns of the central government employees regarding pension. A committee has been formed under the chairmanship of Finance Secretary TV Somanathan to consider this issue. The government has already decided to start the old pension scheme again. But, it wants to allay the concerns of the central government employees regarding pension. Opposition parties have been demanding to restart the old pension scheme.
50% pension guaranteed in Old Pension Scheme
In the Old Pension Scheme (OPS), employees were guaranteed 50% of their last salary as pension. That is why it is called Defined Benefit Pension Scheme. This is not the case with NPS, because it is a defined contribution scheme. In this, employees contribute 10% of their basic salary. The government contributes 14% of their basic salary. The Somanathan Committee has studied the pension system in other countries. It has also seen the changes made in the pension system by states like Andhra Pradesh.
Good returns on long-term contribution to NPS
According to a TOI report, the government is considering giving 50% pension of the last salary to those employees who work for 25-30 years. Officials say that employees are getting satisfactory returns on investing in NPS for 25-30 years, which can be compared with the pension received in the old pension scheme. The complaint of getting less pension from NPS has mainly come from those people who leave the scheme before completing 20 years. The government is thinking of creating a dedicated fund, which will be like corporate retirement benefits. Talks are still going on about this.
The central government started NPS in 2004
The central government started the National Pension System for its employees from January 1, 2004. Only the armed forces have been kept out of this system. The government also opened NPS for common people in 2009. A person aged between 18 to 70 years can start investing in NPS. One also gets good tax benefits on investment in it.
