Under the Old Pension Scheme (OPS), employees receive a pension equal to 50% (half) of their last drawn basic salary at the time of retirement.
Through this scheme, retirees are also provided with medical allowance and reimbursement of medical bills after retirement.
Under this scheme, a retired employee is entitled to gratuity of up to ₹20 lakh.
Government reiterates its stand on restoration of Old Pension Scheme
However, the government has once again clarified its position on the restoration of the Old Pension Scheme. Replying to a question raised in the Lok Sabha regarding the reinstatement of OPS, Minister of State for Finance Pankaj Chaudhary said that the government has no such proposal at present.
But according to reports, the government may take a major decision on the Old Pension Scheme in the election year.
Recommendations made by a high-level panel
The central government may also make changes to the National Pension System (NPS) to ensure that employees receive at least 40–45% of their last drawn salary as pension after retirement. This recommendation was made by a high-level panel.
According to a report by Hindustan Times, two people familiar with the matter said that the proposal is currently under consideration.
Government intervention may be required
The government may introduce certain changes in the NPS. The revised pension scheme would remain linked to market returns, but the government is working on a system to ensure that employees receive at least 40% of their last salary as pension.
As per the report, an official said that the government could fix a base pension amount. This would mean that if the pension payout falls below the base amount, the government would have to intervene to make up for the shortfall.
At present, employees are earning average returns ranging between 36% and 38%.
