News of the benefits of crores of government employees, there will be no worry after retirement

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Old Pension Scheme (OPS) There is good news amid the demand for implementation. Modi government is considering to fulfill this wish of government employees. If media reports are to be believed, the central and state governments are looking for such an option, so that the demand of the employees can also be fulfilled and there is no burden on the exchequer. She is trying to implement pension reform by adopting a middle path. Crores of government employees will be benefited by this.

These are the options of old pension

1. One option they have is to offer guaranteed pension to government employees at about 50% of the last drawn salary under NPS without putting too much burden on the exchequer. Changes should be made to the existing plan.

2. OPS has many advantages while NPS works on the contribution of the employee. At present, under the NPS, also known as the New Pension Scheme, a person is allowed to withdraw 60% of the accumulated amount at the time of retirement. Such withdrawals are also tax-free. The remaining 40% is invested in Annuities, which can provide a pension equal to about 35% of the last drawn salary. However, it is not a guaranteed pension as the returns are market linked.

Pension is revised in OPS, not in NPS

Officials believe that NPS can be revised in such a way that at the time of retirement, the employee gets back around 41.7% of the contribution as a lump sum amount. An official said that if the 58.3% corpus fund, which is made up of 14% contribution from the central and state governments, is annuitized, then the pension in NPS can be around 50% of the last salary. If the actual return is less than the guaranteed amount, the difference can be bridged by the respective government making a small contribution to the NPS. Pension is revised in OPS, which is not there in NPS. The official said that there are ways to resolve the issue as well.

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