8th Pay Commission: What is the old pension scheme that 2.6 million employees are demanding be reinstated? Understand the full details.

Discussion about the Eighth Pay Commission is raging across the country. The central government has also issued its Terms of Reference (ToR). Simultaneously, 2.6 million central government employees have once again intensified their demand for the reinstatement of the Old Pension Scheme (OPS). They state that the old pension scheme should be implemented when the Eighth Pay Commission's recommendations are finalized, as a secure income after retirement is a key requirement.

The National Council of JCMs (NC-JCM) has stated in a letter to the government that the reinstatement of the OPS is essential for the 2.6 million employees recruited after January 2004 and included in the NPS. The organization states that this is a "long-pending and just demand, linked to the security and dignity of employees after retirement."

The question now is: what exactly is the Old Pension Scheme, the demand for its reinstatement has intensified.

What is the Old Pension Scheme?

Under the OPS (Old Pension Scheme), government employees receive a full monthly pension after retirement. This pension is up to 50% of the employee's last salary. It also includes a dearness allowance, which increases every six months. This scheme is fully funded by the government, meaning the employee does not have to contribute from their salary. The entire amount is paid by the government. The pension is paid for life, and after the employee's death, the spouse also receives a family pension. It is completely guaranteed and secure.

The Old Pension Scheme was in place since the British era. It continued after independence and was applicable to all government employees until January 1, 2004. The New Pension Scheme (NPS) was introduced on January 1, 2004, which led to the discontinuation of the OPS.

Why has the demand for the reinstatement of the OPS increased?

Employees say that the pension under the National Pension Scheme (NPS) is market-dependent, making post-retirement income uncertain. Many employees receive a pension much lower than expected upon retirement. This is why the demand for OPS has grown rapidly.

NC-JCM argues that government employees serve for 30-35 years, and therefore, they have the right to receive a stable and respectable pension. The organization also stated that several states, such as Rajasthan, Himachal Pradesh, Punjab, and Chhattisgarh, have already reinstated OPS, so the central government should also take the initiative.

What is the National Pension Scheme?

The National Pension Scheme (NPS) is a new pension system introduced in 2004. Under this scheme, 10% of an employee's salary is deducted every month, with the government contributing 10-14%. This money is invested in the stock market, bonds, and government securities. Upon retirement, 60% is received in lump sum, with the remaining 40% being used to purchase an annuity to generate a monthly pension. The pension amount depends on market fluctuations, so it is not fully guaranteed. The risk remains with the employee.

What is the OPS's connection to the Eighth Pay Commission?

Employee organizations say that pension reforms should also be implemented while the government is considering the 8th Pay Commission. They believe that if OPS is reinstated, millions of employees will receive future financial security.

What steps could the central government take?
According to government sources, the central government is currently working on reforms to the NPS. While no clear indication has been given regarding the reinstatement of OPS, employee pressure is mounting, and amid discussions about the 8th Pay Commission, this issue has once again become a top priority.