Old Pension Scheme – The Old Pension Scheme (OPS) is making a comeback, offering a one-time opportunity for eligible government employees to switch from the New Pension Scheme (NPS) back to the old, guaranteed pension structure. Starting from May 15, 2025, this chance will be available for a limited period, allowing employees to secure a more stable post-retirement income without being exposed to market risks.
With this move, the government is responding to concerns over financial security in retirement, giving employees a chance to opt for a system that promises a fixed monthly pension.
What is the Old Pension Scheme (OPS)?
The Old Pension Scheme (OPS) is a retirement benefit plan that guarantees a fixed monthly pension based on the employee’s last drawn salary and years of service. Unlike the New Pension Scheme (NPS), which relies on market-linked contributions, the OPS offers a predictable pension that is not subject to market volatility. The scheme is fully funded by the government, and employees are not required to contribute any personal savings to it.
Key features of the OPS include:
- Guaranteed monthly pension: The pension is calculated as 50% of the last drawn salary.
- No employee contribution: Unlike NPS, employees do not need to contribute any part of their salary.
- Eligibility: Employees are eligible for the pension after completing 10 years of service.
- Inflation protection: The pension is adjusted for inflation through Dearness Allowance (DA), ensuring that its value stays in line with the rising cost of living.
- Family pension: In case of death, the family of the employee is entitled to a pension.
Who Can Apply for OPS from May 15?
This opportunity to switch to the Old Pension Scheme is available to employees who meet certain criteria. Only government employees who joined the service before January 1, 2004, and are currently under the NPS, can apply. Additionally, employees must not have withdrawn their NPS corpus and must submit their applications between May 15 and August 15, 2025.
The OPS revival applies to central and select state government employees. Each department will review the applications and approve them based on their eligibility.
States That Have Already Implemented OPS
Several states in India have already switched back to the OPS for their employees, serving as an example for others to follow. These states include:
- Rajasthan (since April 2022)
- Chhattisgarh (since May 2022)
- Punjab (since November 2022)
- Jharkhand (since December 2022)
- Himachal Pradesh (since April 2023)
While states like West Bengal and Maharashtra have not yet made a decision, the growing trend suggests more states may follow suit in the near future.
Why Choose OPS Over NPS?
Switching to the Old Pension Scheme offers several benefits over the NPS, which is based on market performance. The key advantages of OPS are:
Also Read:
8th Pay Commission Update : Shocking Salary Jump with 3.68 Fitment Factor – Biggest Pay Hike Ever
- Predictable income: The OPS guarantees a fixed pension, providing greater financial stability in retirement.
- No market risk: Unlike the NPS, which is subject to market fluctuations, the OPS provides a guaranteed income.
- Family support: The OPS includes a family pension, ensuring that the employee’s family is financially protected in case of death.
- No personal contribution: Employees don’t have to contribute a portion of their salary to the pension fund, making it financially easier.
- Regular DA adjustments: The pension is revised twice a year to keep pace with inflation, helping maintain its purchasing power.
OPS vs NPS
Here’s a comparison between the two pension schemes to help you understand the key differences:
| Feature | Old Pension Scheme (OPS) | New Pension Scheme (NPS) |
|---|---|---|
| Type of Scheme | Defined Benefit | Defined Contribution |
| Monthly Pension | Fixed and guaranteed | Market-dependent |
| Risk Exposure | None | Subject to market performance |
| Government Contribution | 100% funded by the government | 14% by government, 10% by employee |
| Tax Benefits | Limited | Available under 80C and 80CCD |
| Withdrawals | Not allowed | Partial and full withdrawals possible |
| Family Pension | Yes | Limited |
How to Apply for OPS?
If you’re eligible and wish to switch to the OPS, here’s how to apply:
- Submit your application: You need to submit a written request to your department head to switch from NPS to OPS.
- Complete the application form: The HR department will provide a form for the switch, which you need to fill out.
- Provide required documents: Along with the application, submit your service records, proof of joining date, and NPS account status.
- Approval process: After submission, the department will verify your details. Once approved, your NPS contributions will be frozen, and you’ll be moved to the OPS system.
- Pension update: Your pension records will be updated under the OPS structure, and you’ll start receiving a fixed pension after retirement.
Important Dates to Remember
Make sure you don’t miss the key dates for applying to switch to OPS:
- Start of OPS Revival Window: May 15, 2025
- Last Date to Apply: August 15, 2025
- Department Review Deadline: September 30, 2025
- Final Approval: October 15, 2025
- Pension Under OPS Begins: November 1, 2025
The return of the Old Pension Scheme offers a valuable opportunity for eligible government employees to secure a stable and predictable retirement income. If you’re considering opting for OPS, now is the time to act. Carefully review your financial needs and future goals before making a decision, as this may be a one-time chance to benefit from a pension system that provides greater stability and protection compared to the market-driven NPS. If you’re eligible, don’t miss out on this opportunity to ensure a secure future for yourself and your family.