Archive · 18 Jul 2026
Old Pension Scheme comeback for select employees
The Old Pension Scheme (OPS), which was replaced by the National Pension System (NPS) in 2004, is making a limited comeback for certain employees.
The Central government and Andhra Pradesh have allowed some employees who applied for jobs before the NPS was introduced but joined later to opt for the OPS.
This decision aims to help those who missed out on the OPS due to delays in their recruitment process.
The OPS offers a guaranteed pension based on the last salary, while the NPS is a market-linked scheme where both the employee and the government contribute.
The latest measures suggest that governments are gradually addressing specific issues related to pension schemes, but the NPS remains the default for most employees.
The Old Pension Scheme (OPS) is being revived for select categories of employees who applied before January 1, 2004, but joined service later.
The Central government's clarification allows compassionate ground appointees and certain other employees to opt for the OPS.
Andhra Pradesh has also given a one-time option for certain employees to switch to the OPS.
The OPS offers a guaranteed pension equal to 50% of the last drawn salary, while the NPS is a market-linked, contributory scheme.
The NPS remains the default pension scheme for most Central government employees who joined service after January 1, 2004.
- Who
- Central and Andhra Pradesh governments, compassionate ground appointees, and certain employees recruited before specific dates.
- What
- Limited revival of the Old Pension Scheme (OPS) for select categories of employees.
- When
- Centre's clarification issued on June 22, 2026, with implementation beginning on July 7, 2026, and Andhra Pradesh's decision announced on July 13, 2026.
- Where
- India, specifically Central government and Andhra Pradesh state.
- Why
- To address specific recruitment-related anomalies and provide relief to employees disadvantaged by the timing of their recruitment.
Government's Limited OPS Revival
NPS as Default Pension Scheme
Eligibility and Implementation
Government's Limited OPS Revival
The government is allowing certain categories of employees, such as compassionate ground appointees and those recruited before January 1, 2004, to opt for the Old Pension Scheme (OPS). This move aims to address specific recruitment-related anomalies and provide relief to employees who were disadvantaged by the timing of their recruitment.
NPS as Default Pension Scheme
The National Pension System (NPS) remains the default pension scheme for the vast majority of Central government employees who joined service after January 1, 2004. The NPS is a market-linked, contributory scheme that requires employees to contribute 10% of their basic pay and Dearness Allowance, with the government contributing 14%.
Pension Benefits
Government's Limited OPS Revival
The OPS offers a guaranteed pension equal to 50% of the last drawn salary along with Dearness Allowance, without requiring any contribution during service. This provides a sense of security and financial stability for retirees.
NPS as Default Pension Scheme
The NPS, while offering potential for higher returns through market-linked investments, does not guarantee a fixed pension amount. Retirement benefits under the NPS depend on market performance, which can be uncertain and volatile.
Government Contribution
Government's Limited OPS Revival
Under the OPS, the government bears the entire cost of the pension, providing a defined benefit to retirees without any employee contribution.
NPS as Default Pension Scheme
The NPS requires a 10% contribution from employees and a 14% contribution from the government. This shared contribution model is designed to ensure the sustainability of the pension system but shifts some of the financial burden onto employees.
- Old Pension Scheme (OPS)
- Guaranteed pension equal to 50% of last drawn salary with Dearness Allowance, no employee contribution required.
- National Pension System (NPS)
- Market-linked, contributory scheme with 10% employee and 14% government contributions.
- Unified Pension Scheme (UPS)
- Combines features of OPS and NPS, with 10% employee and 18.5% government contributions, guaranteeing 50% of average basic pay drawn during the last 12 months of service.
- Eligible Employees for OPS
- Compassionate ground appointees who applied before January 1, 2004, and certain employees recruited before September 1, 2004, in Andhra Pradesh.
- Implementation Timeline
- Centre's clarification issued on June 22, 2026, with implementation beginning on July 7, 2026, by CSIR.
- Andhra Pradesh's Decision
- One-time option for certain employees to switch to OPS, announced on July 13, 2026.