**Summary:**
In response to queries regarding the restoration of the Old Pension Scheme (OPS), the Ministry of Finance clarified that there is no proposal under consideration to reinstate OPS for Central Government employees covered under the National Pension System (NPS). The government transitioned from OPS due to concerns about its unsustainable fiscal burden.
Instead, the government introduced the Unified Pension Scheme (UPS) as an option under NPS, aiming to provide defined benefits upon retirement while maintaining fiscal sustainability. UPS was introduced through a notification on January 24, 2025. Under UPS, retirees with a minimum of 25 years of qualifying service are assured a payout of 50% of their average basic pay (calculated over the twelve months immediately preceding retirement). Payouts will be proportionate for those with less than 25 years of service.
Employees who opt for UPS under NPS are also eligible for benefits under the CCS (Pension) Rules, 2021, or the CCS (Extraordinary Pension) Rules, 2023, in the event of death during service or discharge due to invalidation or disablement. The features of UPS, including the definition of family, are designed to ensure assured payouts while preserving the fund's fiscal stability.
Key Entities Referenced
Old Pension Scheme (OPS): A pension scheme that the Government of India is considering whether to restore.
SHRI SUDAMA PRASAD: Member of LOK SABHA who raised a question regarding the restoration of the Old Pension Scheme.
SHRI UTKARSH VERMA MADHUR: Member of LOK SABHA who raised a question regarding the restoration of the Old Pension Scheme.
MINISTRY OF FINANCE: The government ministry responsible for finance, headed by SMT. NIRMALA SITHARAMAN.
SMT. NIRMALA SITHARAMAN: The Minister of Finance who answered questions regarding the Old Pension Scheme and the New Pension Scheme.
National Pension System (NPS): A defined contribution-based pension scheme introduced for Central Government employees joining service on or after 01.01.2004, except armed forces.
Unified Pension Scheme (UPS): An option under NPS with the objective of providing defined benefits after retirement to the Central Government employees covered under the NPS.
CCS Pension Rules, 2021: Pension rules under which Government employees who opt for UPS under NPS shall also be eligible for option for availing benefits.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
*****
LOK SABHA
STARRED QUESTION NO. *308
ANSWERED ON MONDAY, 11 AUGUST, 2025/ SRAVANA 20, 1947 (SAKA)
RESTORATION OF OLD PENSION SCHEME
*308. SHRI SUDAMA PRASAD
SHRI UTKARSH VERMA MADHUR
Will the Minister of FINANCE be pleased to state:
(a) whether the Government proposes to restore the Old Pension Scheme (OPS), if so, the details
thereof and if not, the reasons therefor along with the reasons for introducing UPS;
(b) whether the Government is aware about the non-feasibility of the New Pension Scheme and if
so, the details thereof;
(c) the reasons for excluding unemployed son, unmarried/widowed/divorced daughter and
dependent parents from the definition of family in UPS; and
(d) the reasons for the reduced pension in UPS as compared to OPS and the declaration of UPS
only through a Press release?
ANSWER
THE MINISTER OF FINANCE
(SMT. NIRMALA SITHARAMAN)
(a) to (d) A Statement is laid on the Table of the House.
*******STATEMENT OF LOK SABHA STARRED QUESTION NO. *308 REGARDING
“RESTORATION OF OLD PENSION SCHEME” RAISED BY SHRI SUDAMA PRASAD AND
SHRI UTKARSH VERMA MADHUR, ANSWERED ON 11.08.2025.
(a) to (c) There is no proposal under consideration of the Government of India for restoration of Old
Pension Scheme (OPS) in respect of Central Government employees covered under National Pension
System (NPS). The Government had moved away from OPS due to its unsustainable fiscal liability on
the Government exchequer. NPS is a defined contribution-based scheme which was introduced for
Central Government employees (except armed forces) joining service on or after 01.01.2004. With a
view of improving upon the pensionary benefits for such employees, a Committee was constituted under
the chairpersonship of the then Finance Secretary to suggest measures to modify the NPS. Based on the
deliberations of the Committee with stakeholders, Unified Pension Scheme (UPS) has been introduced
as an option under NPS with the objective of providing defined benefits after retirement to the Central
Government employees covered under the NPS.
The features of UPS including the definition of family have been designed in such a way so as to ensure
payment of assured payouts while also maintaining fiscal sustainability of the fund. Further, the
Government employees who opt for UPS under NPS shall also be eligible for option for availing benefits
under the CCS (Pension) Rules, 2021 or the CCS (Extraordinary Pension) Rules, 2023, in the event of
death of the Government servant during service or his discharge on the ground of invalidation or
disablement.
(d) UPS has been introduced through a notification by the Government on 24.01.2025, as an option
under NPS. Under UPS, assured payout is admissible on retirement @ 50% of twelve monthly average
basic pay, immediately prior to retirement after a minimum 25 years of qualifying service. In case of
lesser qualifying service period, proportionate payout would be admissible.
******