The Old Pension Scheme (OPS) continues to spark nationwide debate, especially as 2025 brings fresh discussions around its possible revival. With several states already reinstating OPS and the Centre under increasing pressure, understanding the latest developments is crucial for government employees and pensioners alike.
In this article, we break down the key updates for 2025, including eligibility rules, core benefits, financial implications, and the big question—Will OPS return nationwide?
What is the Old Pension Scheme (OPS)?
The Old Pension Scheme is a defined benefit pension system where eligible government employees receive a guaranteed monthly pension post-retirement. The pension is typically 50% of the last drawn salary, along with applicable Dearness Allowance (DA). Unlike the New Pension Scheme (NPS), OPS is not market-linked and poses no risk to the retiree..
Key OPS Updates in 2025
In 2025, multiple states have moved decisively on OPS:
- Rajasthan, Chhattisgarh, and Himachal Pradesh have already reinstated OPS for state employees.
- The Central Government is still evaluating its feasibility, citing fiscal concerns and long-term sustainability.
- National-level discussions are ongoing, but no final verdict has been declared.
OPS vs. NPS: Quick Comparison
| Feature | Old Pension Scheme (OPS) | New Pension Scheme (NPS) |
|---|---|---|
| Pension Type | Fixed (50% of last drawn salary + DA) | Market-linked (returns-based) |
| Risk Level | No risk (fully government-funded) | Market-dependent (with investment risk) |
| Employee Contribution | None | 10% of salary |
| Government Contribution | 100% (taxpayer-funded) | 14% of salary |
| Financial Impact on Government | High | Moderate |
| Family Pension | Yes (for dependents) | Yes (as per rules) |
Who is Eligible for OPS?
Traditionally, government employees recruited before January 1, 2004 are covered under OPS. However, some states have extended OPS to those hired after 2004, depending on local policies.
As of now, the central government has not extended OPS to post-2004 employees, but demand is increasing from unions and employee groups.
Major Benefits of the Old Pension Scheme
- Fixed monthly pension: 50% of last drawn basic salary + DA.
- No contribution required from employees.
- Family pension benefits: Continued support for dependents after the employee’s death.
- Inflation protection: With DA revision, pension adjusts over time.
Fiscal Challenges and Concerns
While OPS ensures security for retirees, it also places a heavy financial burden on the government.
Projected Financial Impact:
- Estimated annual burden: ₹1.75 lakh crore if fully reinstated.
- Long-term sustainability: Experts warn that OPS could strain public finances and increase future liabilities.
Will the Central Government Restore OPS?
So far, the central government has shown reluctance to fully restore OPS due to its potential fiscal impact. Though political pressure is mounting, any decision is likely to follow detailed cost-benefit assessments.
Employees are encouraged to stay updated with official announcements for any changes in pension policy.
Conclusion
As 2025 unfolds, the Old Pension Scheme remains a hot topic in India’s public policy space. While several states have embraced OPS, the central government remains cautious, balancing employee welfare with fiscal prudence.
Whether OPS returns in full or sees a partial revival depends on future evaluations and political will. Government employees should keep a close eye on further developments to plan their retirement effectively.
FAQs
Is the Old Pension Scheme back for Central Government employees?
Not yet. The central government is still evaluating the financial implications and has not announced a full-scale restoration.
Can post-2004 employees get OPS benefits?
Only in certain states that have decided to extend OPS benefits beyond 2004 recruits. The central government has not made such a provision yet.
How much pension is given under OPS?
Under OPS, retirees receive 50% of their last drawn salary plus DA as a monthly pension.
Is there any contribution required from employees under OPS?
No. OPS does not require any employee contribution—it is entirely funded by the government.
What is the main financial concern with OPS?
The main concern is the high financial burden on the government, estimated at ₹1.75 lakh crore annually if implemented nationwide.