The government’s grandeur came forth with a huge announcement regarding the resurrection of the Old Pension Scheme (OPS). The very decision is expected to have a positive effect on the lives of thousands of government employees who have been demonstrably crying for the restoration of the scheme.
Old Pension Scheme In Perspective
The old pension scheme, which was in operation till 2004, provided the benefit of a guaranteed pension to a government employee based on the last drawn salary. Thereafter, an employee received a minimum pension equivalent to 50% of the last-drawn salary, plus Dearness Allowance (DA) and medical facilities. The last stoppage of the old pension scheme occurred in January 2004 with the organization of the New Pension Scheme (NPS), itself entirely contribution based and, hence, subject to the principles of market risk as per asset allocation.
The Government’s Decision
The latest formal announcement seems to come after a series of protests, clamors, and representations by unions of employees and pensioners demanding such restoration of an Old Pension Scheme for some categories of employees.
This has been taken as a very laudable step toward grant of financial security for retired government employees. Despite yet being clear about the basis of eligibility and implementation, there was a hint dropped by the government that employees who joined the services before the erstwhile Old Pension Scheme was stopped on the advent of NPS in 2004, will be the first in line and main beneficiaries of restoration that will eventually include state government employees, along with all autonomous bodies that might come under the purview with this development.
The Shift
Pursuing OPS is a need to help stability of pensions. Thus, the task to be generated by reinstating OPS will address the instability created with investments for NPS market-drivendly allocation. This caused a great anxiety in those on the verge of retirement-hoards into cash or debts- due to an actual fulfillment of the pension obligation not assured by a mere-not-to-say-abrasive-political decision but by the performance of the capital market. This assurance comes in very late normally-nay, delayed up to the threshold of retirement. Ops work on the principle of no alternate, thus acquiescing for consideration.
Coming Next
- An Official Notification Will be Issued: Soon an official notification will come out with elaborate guidelines for employees and pensioners.
- Stand Yourself Eligible: A dedicated portal or helpline could arise for employees to check their eligibility for the OPS restored.
- Pensions Calculation: Pension calculations are likely to return again to the old way in which pensions would be calculated on the basis of 50% of the last salary drawn.
Conclusion
The government creates a ray of hope to the employees. With all self-respecting customs considered, the employees are requested to keep their burning hope alive.
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