Proposed Changes in NPS Rules to Provide Assured 40%-45% Pension

There is a dispute between the Central Government and some states regarding the New Pension Scheme (NPS) and the Old Pension Scheme (OPS) for government employees. In light of this, reports suggest that the Central Government may change the NPS rules to provide government employees with an assured pension of 40% to 45%.

Opposition-ruled states have been advocating for the rollback of NPS. This issue has gained prominence in recent state elections, with some parties making it a central point of their campaign. The government has established a four-member panel in response to the growing demand for the NPS rollback. The panel aims to review the NPS and propose measures to enhance the pension benefits for government employees currently covered under the scheme.

According to recent reports, the Central Government is considering introducing assured pensions within the existing NPS framework instead of reintroducing the OPS. The proposed changes would involve modifying the market-linked NPS under the National Pension System to provide government employees with assured pensions.

According to the report, the government has clarified that it has no plans to revert to the old pension system. The report quotes two government officials who explained that under the existing NPS, employees receive approximately 38% of their last salary as a pension. If the government guarantees a 40% return, it would only need to cover a 2% shortfall. However, it is important to note that the government’s expenses could increase if market-linked returns decrease in the future.

For any clarifications/feedback on the topic, please contact the writer at samiksha.swayambhu@clear.in