Employee unions representing nearly 26 lakh Central Government employees have intensified their demand for the restoration of the Old Pension Scheme (OPS). The demand has gained strong momentum as discussions around the 8th Central Pay Commission (8th CPC) begin to surface.
Under the existing National Pension System (NPS), employees contribute a portion of their salary to a market-linked retirement fund, which does not guarantee lifelong pension. In contrast, OPS offered a defined, assured, and inflation-linked pension, making it significantly more attractive for long-term financial security.
Why Employee Bodies Are Demanding OPS Again
1. Guaranteed Pension vs Market-Linked Returns
- OPS provided a fixed lifelong pension, typically 50% of the last drawn salary with DA.
- NPS returns vary depending on markets; retirees fear insufficient monthly income, especially during inflationary periods.
2. Rising Cost of Living
- With DA rising periodically due to inflation, pension under OPS automatically increased.
- Employee bodies claim that the current NPS corpus cannot effectively shield retirees from rising healthcare costs, rent, fuel prices, and family obligations.
3. Social Security Concerns
- OPS ensured family pension, medical security, and complete financial protection after retirement.
- Under NPS, employees say there is limited protection, especially if the corpus is low or markets perform poorly near retirement.
4. Parity with State Government Decisions
- Several states like Rajasthan, Punjab, Chhattisgarh (earlier), Delhi, and Himachal Pradesh announced a shift back to OPS for state employees.
- Central employee unions argue that if states can do it, the Centre should also consider it, especially for uniformity.
5. No Employer Contribution Under OPS
- Under OPS, the government bore the full pension liability.
- Under NPS, employees contribute 10% of salary + DA, which reduces take-home income.
6. Pressure Ahead of the 8th Pay Commission
- With expectations of 8th CPC around 2026, unions believe this is the right time to push for OPS so that pension structure and retirement benefits can be comprehensively revised.
Key Demands Submitted to the Prime Minister
Employee bodies and federations have sent formal communication requesting the following:
1. Full Restoration of OPS: A return to the earlier system where:
- Pension = 50% of last drawn salary
- Dearness Relief (DR) applied twice a year
- Family pension ensured
- No market risk
2. Scrapping NPS for Central Government Employees
They argue that:
- NPS is “uncertain, risky, and inadequate”
- Many retirees under NPS are receiving ₹2,000–7,000 per month, which is too low for survival
- A government job must come with “complete post-retirement security”
3. OPS Inclusion in 8th CPC Terms of Reference: Unions want the 8th CPC to:
- Review the pension structure
- Reintroduce OPS as part of central pay and retirement benefits
- Include inflation-linked assured pension as a formal recommendation
4. Government-Guaranteed Minimum Pension: Until full OPS is restored, employee bodies seek a government-guaranteed minimum pension, similar to EPS-95, but with a more realistic amount.
Concerns Highlighted by Employee Bodies
• Financial Insecurity Under NPS: Employees nearing retirement say their NPS corpus may not last long in old age.
• Unpredictability of Market Returns: Stock market volatility impacts pension stability.
• Lack of Post-Retirement Medical Benefits: No comprehensive healthcare security under NPS.
• Moral & Social Responsibility of the Government: Unions argue that employees serving the government for 30–35 years deserve lifelong assured pension.
Government’s Current Stand
While the Central Government has not officially agreed to restore OPS, it has:
- Set up high-level committees to evaluate NPS improvements
- Considered proposals for Guaranteed Pension under NPS
- Indicated that discussions may continue around 8th CPC formation
The government’s next steps will significantly influence employee satisfaction and administrative efficiency ahead of the 8th CPC cycle.
Potential Impact If OPS Is Restored
For Employees
- Higher financial security
- No contribution from salary
- Predictable lifelong income
Government
- Increased pension liability
- Long-term fiscal pressures
- Need for structured pension budgeting
For Society
- Better older people welfare
- Reduced dependency on social schemes
Conclusion
The call for restoring the Old Pension Scheme has become one of the biggest workforce demands in 2025–26. With nearly 26 lakh Central Government employees urging the move and the 8th Pay Commission expected soon, the debate is far from over.
A final decision will depend on:
- Fiscal feasibility
- Political considerations
- Long-term pension sustainability
However, employee bodies are clear: they want OPS back, and they want it before the 8th CPC is notified. The coming months will be decisive for India’s pension reforms.
FAQs
1. What is the main reason employees want OPS back?
Ans: Employees want OPS because it guarantees a fixed, lifelong, inflation-linked pension, unlike NPS which depends on unpredictable market returns.
2. How many central government employees are affected by NPS?
Ans: Nearly 26 lakh employees who joined service after 1 January 2004 are under NPS.
3. Will the government restore OPS?
Ans: No official confirmation yet, but committees have been formed to examine NPS improvements and employee representations are under review.
4. How is OPS different from NPS?
Ans: OPS gives 50% last salary as pension, DA benefits, and full government funding. NPS requires employee contribution, is market-linked, and offers no guaranteed pension.
5. Can OPS be included in 8th CPC (Central Pay Commission) recommendations?
Ans: Employee bodies are strongly demanding it, and it may become part of the Terms of Reference, depending on government approval.
My self Anita Sahani. I have completed my B.Com from Purbanchal College Silapathar. I am working in Dev Library as a Content Manager. A website that provides all SCERT, NCERT 3 to 12, and BA, B.com, B.Sc, and Computer Science with Post Graduate Notes & Suggestions, Novel, eBooks, Health, Finance, Biography, Quotes, Study Materials, and more.
