Why Old Pension Scheme is Better than New Pension Scheme (NPS) ?


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Tuesday, 26 April 2022

Why Old Pension Scheme is Better than New Pension Scheme (NPS) ?

In a major step towards employee welfare and development, the Rajasthan government has implemented the Old Pension Scheme (OPS) for all the government employees appointed on or after 1st Jan 2004. It is also defined that employees will get benefit like pension/family pension, gratuity and communicated pension amount, making them much stronger socio economically.

The government has stopped deducting the 10%  from monthly salary towards NPS.

Why OPS is better than NPS ?

OPS is always better than NPS for employees and their family in long run.

Shortcomings of New Pension Scheme 

1. No Guarantee of pension

2. Mandatory 10% contribution by employee

3. Assurance of 100% coverage of eligible employees is still lacking in the scheme.

4. National Human Rights Commission has asked Govt of India to set up committe for review of NPS for safeguarding human rights of employees

5. Even after 15 years from implementation of NPS, rules on service conditions/retirement benefits in respect of employees covered by NPS are still pending for finalization.

6. There is neither any indication whether acturial evaluation of the scheme was conducted once in 2 years nor has there been adoption of any other mechanism to access rge viability of the scheme.

4. 40% fund redemption from the NPS is taxed.

Also Read - Revised Family pension With 30% Hike in PSBs - Updates

Advantage of Old Pension Scheme

1. Pension guarantee : Employee gets 50% of the last month salary as pension every month.

2. Employee doesn't have to pay any contribution.

3. Dearness Allowance for securing employees against inflation.Commutation of pension up to 33%.

4. Income from OPS is not taxed.

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