OLD PENSION SCHEME (OPS) (Syllabus: GS Paper 2– Government schmes)

Context: The states, which revert to the Old Pension Scheme (OPS) could face "unsustainable" fiscal stress, says an article in the Reserve Bank of India.

Old Pension Scheme (OPS)

• About: The scheme assures life-long income, post-retirement. 

o It is also known as the “Defined Benefit Scheme,” providing government employees with 50 percent of their basic salary to secure their future.

• Amount of pension derived: 50 per cent of the last drawn salary
• Avail: Only government employees
• Scheme was discontinued: in 2004

New Pension Scheme (NPS)

• About: This pension programme is open to employees from the public, private, and even the unorganized sectors except those from the armed forces.
• Introduced by: Central government in April 2004.
• Objective: To invest in a pension account at regular intervals during the course of their employment.
• Nodal agency: Pension Fund Regulatory and Development Authority (PFRDA)
• Eligibility: Any Indian citizen between 18 and 60 years can join NPS.
• NRIs (Non-resident Indians) are also eligible to apply for NPS.
• Permanent Retirement Account Number (PRAN): Every NPS subscriber is issued a card with a 12-digit unique number called PRAN.
• Minimum contribution in NPS: The subscriber has to contribute a minimum of Rs. 6,000 in a financial year.

National Pension Scheme (NPS)

• About: It voluntary retirement savings scheme is a.
• Launched by: Government of India in 2004.
• Administered by: Pension Fund Regulatory and Development Authority (PFRDA).
• Objective: To provide a pension income to individuals upon their retirement.