The central government is deliberating over the introduction of a new pension scheme that could guarantee at least 50% of an employee's salary as a pension upon retirement. This comes in response to ongoing demands from government employees who have been advocating for the return of the Old Pension Scheme (OPS).
Several states, including Himachal Pradesh, Chhattisgarh, Punjab, Rajasthan, and Jharkhand, have already reinstated the OPS, putting pressure on the central government to follow suit. Although the central government has not fully committed to restoring the OPS, it has formed a committee, led by Finance Secretary T.V. Somanathan, to explore alternatives. The committee is tasked with ensuring that the new scheme guarantees at least a 50% pension to employees at retirement.
Currently, under the National Pension System (NPS), pensions are based on the contributions made by employees, without a fixed pension amount. After examining various international pension models and changes made by the Andhra Pradesh government, the committee found that a 40-45% pension guarantee could be feasible, though it may not suffice for employees with 25-30 years of service.
To address this, the government is considering establishing a special savings account for employees who may fall short in their NPS accounts at retirement. This account would ensure that the required pension amount is met annually by the government, similar to retirement funds set up by private companies.
The proposed scheme aims to provide pension security, particularly for long-serving government employees who may otherwise receive a lower pension under the current NPS. While a full restoration of the OPS is still uncertain, the government's new proposal marks a significant step toward securing the financial future of its employees. Further decisions on this matter are expected in the coming months.
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