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

News-CRUX-10     19th September 2023        
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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.
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