Amidst the demand for old pension, the Center took a big step, a committee will be formed on the pension of government employees

Union Finance Minister Nirmala Sitharaman has made a big announcement amid massive protests by government employees in several states demanding the restoration of the old pension scheme. On Friday, Nirmala Sitharaman said the Center would set up a committee to look into pension-related issues. Introducing the Finance Bill 2023 in the Lok Sabha for consideration and passing, Sitharaman said representations were received that there is a need to reform the National Pension System for government employees. Along with this, he said that I propose to set up a committee under the Finance Secretary to look into this issue of pension.

Sitharaman said that under this, a method should be found so that the need of the employees is taken care of while maintaining fiscal prudence for the protection of common citizens. The decision comes at a time when several non-BJP ruled state governments have decided to replace the old dearness allowance linked pension scheme (OPS) and employees unions in some other states have been demanding the same. Let us tell you that from 2004, the central government under the then Prime Minister Atal Bihari Vajpayee discontinued the old pension scheme and introduced the National Pension Scheme. In the old system, the pension was 50 per cent of the last drawn pay of the employee and the entire amount was paid by the government.

Sitharaman said that this method will be prepared for adoption by both the central government and state governments. NPS works on the basis of defined contribution, where government employees have to contribute 10 percent of their salary to the superannuation fund. . The government gives up to 14 per cent for the pension corpus. The governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have informed the Center about their decision to replace the old pension scheme and have requested for refund of funds deposited under NPS. The Central Government had informed Parliament a few days ago that it was not considering any proposal to restore OPS in respect of Central Government employees recruited after January 1, 2004.