Centre won't revert to old pension scheme, Parl told

The Union government has no plan to shift to the old pension scheme (OPS), which five states have opted for so far, the Centre told the Lok Sabha, underlining that accumulated back contributions of subscribers cannot be used by states to revert to the earlier programme under law.

- Zia Haq

This is the first time the Centre has officially ruled out going back to the previous regime of pensions, and also clarified whether past contributions from subscribers can be utilised to revert to OPS, an unfunded programme where the costs of retirement benefits are borne entirely by the State. The Pension Fund Regulatory & Development Authority Act does not allow such a transfer, minister of state for finance Pankaj Chaudhary stated in a written reply on Monday.

Pensions for government staffers is a politically polarising issue, with several Opposition-ruled states switching to OPS, which offered pensioners monthly benefits of 50% of their last-drawn salary. The new National Pension Scheme (NPS) in force is a market-linked pension plan, launched in 2004, and offers no guaranteed base amount.

At various points over the course of past two years, state governments in Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh, following poll assurances, reverted to OPS for staffers on the states' payroll by notifying the central government and the Pension Fund Regulatory and Development Authority (PFRDA).