NPS To OPS Latest News, Order, and Judgement 2024

NPS To OPS – National Pension Scheme to Old Pension Scheme Latest News, Order, and Judgement 2024

Latest News About Conversion of NPS to OPS for Central Govt Employees

(National Pension System To Old Pension Scheme)

NPS to OPS: The recent news regarding the conversion of the National Pension System (NPS) to the Old Pension Scheme (OPS) for central government employees has sparked interest and raised questions about the effectiveness of the current pension system in India. As retirement is a significant milestone for individuals, especially government employees, it is crucial to examine the advantages and disadvantages of the existing pension scheme and determine whether it requires amendments.

In this regard, we will analyze the current pension system offered to government employees in India and assess its impact on retirees, along with identifying potential changes that can be made to enhance it. While the NPS is a government-sponsored retirement scheme available to all Indian citizens who are employed, it is a defined contribution scheme that provides flexibility, choice, and liquidity. However, there are certain limitations on the type of employment that can be used with it.

Therefore, it is necessary to evaluate the pension system’s effectiveness and determine whether the conversion of NPS to OPS for central government employees would be beneficial. This analysis will assist in identifying potential improvements that can be made to the existing pension scheme to ensure the financial security of government employees during their retirement years.

NPS to OPS DoPT Order on 3.3.2023

On March 3, 2023, the Department of Personnel and Training (DoPT) released a significant order concerning the transition from the National Pension System (NPS) to the Old Pension Scheme (OPS) for specific Central Government employees. The DoPT has declared that qualified Central Government workers who were employed before the introduction of the NPS on December 22, 2003, and were subsequently incorporated under it upon joining service on or after January 1, 2004, are now permitted to switch from the NPS to the OPS. This one-time choice to be covered under the CCS (Pension) Rules, 1972 (now 2021) can be exercised by eligible Government employees until August 31, 2023. To learn more about this development, please click on the provided link.

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1.1.2004 is a Deadline for Central Government Employees

After 2004 – NPS | Before 2004 – OPS

The Central Government Employees are currently divided into two groups in terms of their pensions: the National Pension System (NPS) Employees and the Old Pension Scheme (OPS) Employees. The New Pension Scheme, which is a contributory pension scheme, was introduced on January 1, 2004. As per this scheme, employees who joined after 1.1.2004 were enrolled in the NPS. However, there has been a growing demand among Central Government Employees to do away with the NPS and restore the OPS. It has now been 15 years since the implementation of the NPS, and the total number of NPS subscribers exceeds 18 lakhs. The Railway Federation AIRF and NFIR have requested an exemption from the NPS and for the reinstatement of the Defined Benefit Pension Scheme (Liberalized Pension Scheme, Railway Services (Pension) Rules 1993). The deadline for Central Government Employees to switch from OPS to NPS was 1.1.2004.

National Pension System Latest News on 15.3.2021

Parliament Question and Answer about NPS

On March 15th, 2021, the latest news regarding the National Pension System (NPS) was released. NPS was implemented by the Government of India as a replacement for the defined benefit pension system. This system became mandatory for all new recruits to the Central Government service (with the exception of the armed forces in the first stage) as of January 1st, 2004. Additionally, since May 1st, 2009, it has been made available to all citizens on a voluntary basis. The shift from the defined benefit, pay-as-you-go pension scheme to the defined contribution pension scheme, NPS, was a conscious decision made by the government due to increasing and unsustainable pension bills. The objective was to allocate limited governmental resources towards more productive and socio-economic sectoral development.

NPS is open for subscription to all citizens of India, resident and non-resident, between the ages of 18 to 65 years. Moreover, individuals who have retired at the age of 60 years can also join NPS and contribute until they reach 65 years of age. Any eligible citizen between the ages of 18 to 65 years can subscribe to NPS and can take advantage of various benefits offered by the scheme.

Contributions made to the NPS Tier-I account up to Rs. 1.50 lakhs are eligible for tax deduction under Section 80CCD (1) and Section 80CCE of the Income Tax Act, 1961. Additionally, an extra tax rebate of Rs. 50,000 is allowed for contributions made to NPS Tier-I under Section 80CCD (1B) of the Income Tax Act, 1961. The employer’s contribution to the Tier 1 account of an employee (up to 14% of the salary for Central Government and up to 10% of the salary in case of other employers) is also tax-exempt under Section 80CCD (2) of the Income Tax Act, 1961, subject to a maximum of Rs. 7.50 lakhs under Section 17(2) (vii) of the Income Tax Act, 1961.

Central Government employees who contribute to Tier II NPS accounts for a fixed period of not less than three years are eligible for deduction under Section 80C. As per Section 10(12A) of the Income Tax Act, 1961, the entire amount withdrawn as a lump sum is tax-free. Partial withdrawal of up to 25% of a subscriber’s own contributions before attaining the age of superannuation is allowed, subject to certain conditions.

Transparency and portability are ensured through online access to the pension account by NPS subscribers across all geographical locations and employment portability. All State Governments have notified NPS for their employees except for West Bengal. According to the Central Recordkeeping Agency (CRA), a total of 2,38,599 subscribers from the State Government of Gujarat have joined NPS as of 27.02.2021, and the total Assets Under Management (AUM) for the State Government of Gujarat are Rs. 14,152.36 cr.

Top News About NPS to OPS:

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GOVERNMENT OF INDIA
MINISTRY OF PERSONNEL, PUBLIC GRIEVANCES, AND PENSIONS
LOK SABHA
UNSTARRED QUESTION NO: 589
ANSWERED ON: 20.07.2022

REVERSION TO OLD PENSION SCHEME

589. MS. DEBASREE CHAUDHURI
Will the PRIME MINISTER be please to state:

(a) whether the Supreme Court has dismissed more than half dozen Special Leave Petitions (SLPs) including SLP Nos.15312-15321/2021 and Review Petitions and ordered that Central Government officials whose advertisements were issued before 01/01/2004 and joining and results occurred after 31.12.2003 be reverted back to old pension scheme;

(b) if so, the status of implementation of all such judgements along with the number of employees who have been granted relief therein;

(c) the details of the comments received from the Department of Financial Services and Department of Legal Affairs and the action being taken by the Government for issuing general/executive orders in light of comments received to cover similarly placed employees; and

(d) if not, whether this has led to long litigation process for affected Government employees in the matter which has attained finality and also implemented in some of the judgments, and if so, the comments thereof?

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) & (b): Hon’ble Supreme Court has dismissed some of SLPs/ Review Petitions filed by Union of India against the orders of Hon’ble High Court of Delhi allowing benefit of old pension scheme to those Government servants whose selection process was completed after 01.01.2004. Details of cases is enclosed at Annexure-A.

(c): Department of Financial Services in their comments have conveyed that DoP&PW may take appropriate decision in regard to excluding the employees whose recruitment advertisement was issued on or before 01.01.2004 from the purview of NPS and cover them under OPS.

Department of Legal Affairs has conveyed that the examination of the issue in this Department to the effect that an administrative decision to issue executive instructions providing for coverage of Government servants under old pension scheme who were appointed to Central Government service on or after 01.01.2004 on the basis of advertisement/notification of vacancies issued prior to 01.01.2004 appears to be in order.

There is no decision to issue general instructions in this regard.

(d): National Pension System (NPS) was introduced for Central Government employees by a Notification of Ministry of Finance (Department of Economic Affairs) dated 22nd December 2003. NPS is mandatory for all new recruits to the Central Government service from 1st January 2004 (except the armed forces).

In view of the specific provisions of the Notification dated 22.12.2003, the date of advertisement for the vacancies is not considered relevant for determining the eligibility for coverage under the Old Pension Scheme or the National Pension System.

Annexure- A

Annexure referred to in reply to Lok Sabha Question No. 589 for 20.07.2022

Status of Implementation of judgments after dismissal of SLPs / Review Petitions:

NPS is ‘National Pension System’ and OPS is ‘Old Pension System’. One of the major demands of Central Govt employees is to scrap NPS and reintroduce OPS (NPS to OPS).

The Old Pension Scheme (OPS) is the existing pension scheme for CG employees with a fixed amount of pension after retirement. Whereas the New Pension Scheme (NPS) is a contributory pension scheme without any fixed amount of pension benefits. There will be no guarantee of pension amount after retirement.

The cut-off date for National Pension Scheme is 1 January 2004. Central Government employees who have been appointed on or after 1 January 2004 are all under the new scheme of National Pension Scheme.