Old Pension Scheme Latest News 2023
The Indian government has implemented measures to improve the National Pension System for Central Government employees and safeguard their interests. These initiatives include increasing the government’s contribution from 10% to 14% of Pay plus DA, allowing subscribers to choose their pension funds and investment patterns, compensating for delayed or non-deposit of NPS contributions during 2004-2012, offering tax exemptions under Section 80C of the Income Tax Act, 1961, and raising the tax exemption limit for lump sum withdrawals from 40% to 60%. Additionally, the creation of the Central Civil Services (Implementation of National Pension System) Rules, 2021, and an oversight mechanism in Ministries/Departments for NPS implementation have been established.
On March 16, 2023, the Minister of State for Personnel, Public Grievances and Pensions provided responses to inquiries concerning the conversion of NPS to OPS in the Parliament. Please find the comprehensive set of queries and their corresponding answers below.
GOVERNMENT OF INDIA
MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS
(DEPARTMENT OF PENSION & PENSIONERS’ WELFARE)
RAJYA SABHA
UNSTARRED QUESTION NO. 1888
(TO BE ANSWERED ON 16.03.2023)
DEMANDS FOR REVERTING TO OLD PENSION SCHEME
1888 SHRI DEEPENDER SINGH HOODA:
Will the PRIME MINISTER be pleased to state:
(a) whether Government has received representations from various Unions/ Associations of Central Government Employees from all across the country to discontinue the New Pension Scheme (NPS) and implement the Old Pension Scheme (OPS);
(b) if so, the action taken by Government to meet their demands;
(c) whether Government is considering to revert to the Old Pension Scheme (OPS); and
(d) if so, the details thereof and if not, the reasons therefor?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES AND PENSIONS AND MINISTER OF STATE IN THE PRIME MINISTER’S OFFICE (DR. JITENDRA SINGH)
(a) to (d): Representations have been received from time to time offering inputs on different aspects of National Pension System.
The National Pension System (NPS) was introduced for Central Government employees vide Ministry of Finance (Department of Economic Affairs) Notification No. 5/7/2003-ECB & PR dated 22.12.2003 for all new recruits joining the Central Government service (except armed forces) from 01.01.2004.
On introduction of the National Pension System, the Central Civil Services (Pension) Rules, 1972 were amended. Accordingly, the benefits of old pension scheme under the Central Civil Services (Pension) Rules, 1972 are not admissible to the Central Government civil employees appointed on or after 01.01.2004, under the amended rules.
Government of India has taken many steps for streamlining of NPS for Central Government employees and to protect the interest of the subscribers. These include enhancement of Government’s contribution from the earlier 10% of Pay plus DA to 14% of Pay plus DA, freedom of choice of selection of Pension Funds and pattern of investment to subscribers, payment of compensation for non-deposit or delayed deposit of NPS contributions for any period during 2004-2012, tax exemption under Section 80C of the Income Tax Act, 1961 and increase in tax exemption limit for lump sum withdrawal on exit from earlier 40% to 60% of the amount due, making the entire withdrawal exempt from income tax, framing of Central Civil Services (Implementation of National Pension System) Rules, 2021 and setting up of an oversight mechanism in Ministries/Departments for implementation of NPS.
Source: Lok Sabha Q&A
Important Links:
- 42% Dearness Allowance for Central Govt Employees from 1st Jan 2023
- 7th Pay Commission Basic Salary Calculator India
- Dearness Allowance (DA) Rates Table | Current Central DA Rate
- Government Salary Calculator | Government Pay Scale Calculator
- Go to the Home Page
The National Pension System (NPS) is a voluntary, defined contribution pension system that was introduced by the Indian government for Central Government employees and other individuals. It provides individuals with an avenue to save for their retirement and retirement-related benefits.
The Indian government has implemented several initiatives to improve the NPS, such as increasing the government’s contribution from 10% to 14% of Pay plus DA, allowing subscribers to choose their pension funds and investment patterns, compensating for delayed or non-deposit of NPS contributions during 2004-2012, offering tax exemptions under Section 80C of the Income Tax Act, 1961, and raising the tax exemption limit for lump sum withdrawals from 40% to 60%.
The Central Civil Services (Implementation of National Pension System) was created to ensure that the interests of all Central Government employees are protected through the implementation of the NPS. It oversees the implementation and regulation of the NPS in the Central Government sector.
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