8th Pay Commission: In the meetings of the 8th Pay Commission, government employee unions have always demanded the restoration of the old pension scheme.

Unions have been demanding for years that the Old Pension Scheme (OPS) should be implemented in place of the National Pension System (NPS). But as this debate is gaining momentum again during the discussions of the 8th Pay Commission, now the representatives of the employees have also started believing that it may not be that easy to completely abolish the NPS. Now the question arises why so?

Why challenging to return to OPS?

In fact, almost two decades have passed since NPS was implemented and during this period, more than Rs 16.5 lakh crore has been deposited in the system with the contribution of employees and the government. This money is invested in the stock market, government bonds and various corporate instruments through government financial institutions like LIC, SBI, UTI.

In such a situation, if the government completely returns to OPS, then this huge amount of money will have to be suddenly withdrawn from the market. This will cause huge turmoil in the stock market and bond market. On top of that, there is also a danger of the liquidity crisis deepening.

This is the reason why now many employee organizations are not just talking about bringing back OPS, but are demanding to give ‘OPS like guarantee’ within the framework of the existing NPS or Unified Pension Scheme (UPS).

Why do employees still want OPS?

Despite the complexities of the financial market, government employees demand the Old Pension Scheme (OPS) because OPS assures them of a 100% secure and inflation-free future for life. In OPS, not a single rupee is deducted from the salary in the name of pension. The government bears the entire pension expense from its budget.

In NPS/UPS, employees have to deposit 10 percent of their basic salary in the pension fund every month. They believe that this deduction from their hard-earned money is unfair. In OPS, the government increases Dearness Allowances (DA) twice a year, whereas there is nothing like this in NPS.

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