Pb Govt Restores OPS; How Is It Different Than New Pension Scheme? All You Need To Know!

The Aam Aadmi Party government, ahead of the assembly elections in Gujarat and Himachal Pradesh, has officially announced plans to re-introduce the Old Pension Scheme (OPS) in the state. However, the government also stated that it would give the employees the option to choose between the OPS and the New Pension Scheme (NPS).

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Earlier, the Ashok Gehlot government in Rajasthan had also announced to restore the Old Pension Scheme from the next financial year, similarly the Bhupesh Baghel government of Chhattisgarh, and the DMK-Congress alliance government in Tamil Nadu announced the same. Moreover, the employees have been demanding the re-introduction of the OPS scheme for years.

The Old Pension Scheme, which was discontinued in the year 2004, has now been reintroduced by various state governments, specifically in the opposition parties-ruled states. But what is the difference between the Old Pension Scheme (OPS) and the New Pension Scheme (NPS)? Here’s the basic difference between both the schemes:

The Defined Benefit Pension System (DBPS), which is known as the Old Pension Scheme (OPS), is calculated using the employee’s most recent paycheck. However, in the NPS (New Pension Scheme), known as the Defined Contribution Pension System (DCPS), both the employer and employee make contributions to create a pension fund that is payable upon retirement by way of an annuity or lump sum withdrawal in accordance with regulations.

Furthermore, the NPS, since it was introduced, had been criticised by the employees. Moreover, in a lot of states, they have been protesting against the NPS, demanding the restoration of the Old Pension Scheme. However, the Bharatiya Janata Party favours the NPS, while the opposition, specifically the INC and the AAP, are against the New Pension Scheme, calling it a “hoax” for the employees.

However, the Aam Aadmi Party government of Punjab has now announced to re-introduce the Old Pension Scheme in the state. Subsequently, it’s believed that this step may benefit the party in Gujarat and Himachal assembly elections. This is for the first time that the party is campaigning so actively in both the states, due to which the all-time tussle between the BJP and Congress, seems turning into a triangular contest.

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