The move is likely to cost the exchequer Rs 1,000 crore.
Though OPS was discontinued from January 1, 2004, and employees joining service thereafter were covered under NPS, the Congress party promised to go back to OPS in the 2022 assembly elections.
The Himachal Pradesh government has finally gone back to the Old Pension Scheme (OPS) instead of the National Pension Scheme (NPS) from April 1. were covered under the NPS, the Congress party had promised to switch back to OPS in the 2022 assembly elections.
A notification in this regard has already been issued by Himachal Pradesh Chief Secretary Prabodh Saxena on 17th April. “In view of the decision of the cabinet for implementation of the old pension scheme under the CCS (Pension) Rules 1972, the State Government has decided that as per the notification, the State Government employees (employees and employer’s share) covered under the National Pension System ) will be stopped from April 1, 2023.
The move will benefit both retired and serving employees, and employees with more than 20 years of service will be entitled to a pension of 50 per cent of basic pay and DA. The move is likely to cost the exchequer Rs 1,000 crore.
Earlier this year, after the Himachal Pradesh government decided to restore OPS, Chief Minister Sukhwinder Singh Sukhu had said after a cabinet meeting, “The aim of the government is to provide social security to all. We have decided to implement OPS from the point of view of social security and humanity. Affordability of OPS expenditure will be achieved through financial discipline and reduction in expenses and we believe there is nothing that cannot be done.”
New Pension Scheme Vs Old Pension Scheme
The old pension scheme, called the Defined Benefit Pension System (DBPS), was based on the last pay drawn by the employee. NPS is referred to as Defined Contribution Pension System (DCPS), in which employer and employee contribute as per norms through annuity/lump sum withdrawal to build pension wealth payable at the time of retirement.
Under OPS, the employee can withdraw 50 per cent of the last drawn pay as pension after retirement.
Under NPS, an individual is allowed to withdraw 60 per cent of the accumulated corpus accumulated during his working years at the time of retirement, which is tax-free. The remaining 40 per cent is converted into an annuity product, which can currently provide the individual with a pension of 35 per cent of his last drawn salary.
NPS is applicable to all employees joining the services of Central Government including Central Autonomous Bodies (except Armed Forces) on or after January 1, 2004. a cut-off date.
In case of premature exit under the National Pension System, at least 80 per cent of the accumulated pension wealth of the subscriber is used for purchase of annuity, thereby giving monthly pension to the subscriber and the remaining amount is paid . lump sum amount to the customer.
NPS is applicable to all employees joining the services of Central Government including Central Autonomous Bodies (except Armed Forces) on or after January 1, 2004. a cut-off date.
Under this scheme, subscribers can continue to contribute to NPS till the age of 70 years after their retirement and get additional tax benefits on the contribution.
read all latest business news, tax news And stock market update Here
