OPS Vs NPS: Pension Tension

Economists may be aghast at the revolt against the new pension scheme (NPS) and the clamour for return to the old pension scheme (OPC), but for political leaders, it is a potent election issue that they are pushing for short-term gains

- Rohit Parihar

When Union minister of state (MoS) for finance Bhagwat Karad told the Lok Sabha on February 6 that there is no provision for a refund of the accumulated New Pension Scheme (NPS) corpus to states that have reverted to the Old Pension Scheme (OPS), he was just reiterating the Centre's consistent stand that there will be no return to the old scheme. But it has not discouraged a revolt in the opposition-ruled states. Rajasthan chief minister Ashok Gehlot of the Congress was the first to withdraw from the NPS in March 2022, shifting state employees to the OPS (now called OPS-2) retrospectively from the day of their joining the government job. Indeed, in his budget speech on February 10 this year, Gehlot extended the OPS to staff of state-run universities and public sector undertakings.

Two more states-Chhattisgarh and Jharkhand have stopped contributing to the NPS since, two others-Punjab and Himachal Pradesh-are in the process of doing so and similar return-to-OPS promises are being made by several non-BJP parties in states going to the polls. With government staff up in arms at NPS returns not matching up to those from OPS, party leaders in some BJP-ruled states are also keen to explore better options.

Eknath Shinde, chief minister of Maharashtra, where the BJP runs a government in alliance with the Balasahebanchi Shiv Sena (recently pronounced the 'real' Shiv Sena by the Election Commission), has of late been signalling the need to take a 'middle path' on the OPS versus NPS issue after his BJP allies saw their candidates losing in four of the five legislative council elections in the teachers' and graduates' constituencies. The demand to bring back the OPS is snowballing into a major election issue as it affects 8.5 million state and central government employees currently under the NPS. But why are so many averse to the NPS?

WHAT'S BETTER, OPS OR NPS?