(THE GIST OF PIB) Punjab Cabinet clears old pension scheme

[December-2022]

Earlier, Rajasthan and Chhattisgarh have already reverted to OPS from New Pension Scheme.

Under this, pension to government employees at the Centre and states was fixed at 50% of the last drawn basic pay.
Employees are not required to contribute to their pensions.
It provides assured or ‘defined’ benefit to the retiree. Thus, also called ‘Defined Benefit Scheme’.
Also, the monthly payouts of pensioners increased with hikes in dearness allowance announced by the government.
There was no corpus specifically for pension; pension liabilities would keep climbing every year.

New Pension Scheme, now called National Pension System (NPS), was notified in 2004 to reform the pension scheme and make it more sustainable.
Unlike OPS, in addition to the government, a contribution from employee was made a feature in NPS.
The funds are then invested in earmarked investment schemes through Pension Fund Managers.
It is mandatory to all employees of Central Government (except Armed Forces) and Central Autonomous Bodies joining since January 2004.
Pension Fund Regulatory and Development Authority is regulatory body for NPS.