Centre Confirms No Plan to Restore Old Pension Scheme for Central Employees Under NPS

As per The Moneycontrol report, The Ministry of Finance has officially ruled out any proposal to bring back the Old Pension Scheme (OPS) for central government employees currently covered under the National Pension System (NPS) or Unified Pension Scheme (UPS), despite growing demands from employee associations. 

No Proposal to Replace NPS or UPS with OPS 

On December 15, 2025, Minister of State in the Finance Ministry, Pankaj Chaudhary, clarified in a written response in Lok Sabha that the government is not considering a shift to the OPS for employees under the NPS or UPS.  

The OPS, which was discontinued for employees joining on or after January 1, 2004, provided assured, non-contributory pensions under the Central Civil Services Pension Rules, 1972 (now 2021). 

In contrast, NPS and UPS are contributory schemes where employees contribute 10% of their basic pay and dearness allowance (DA). The government contributes 14% under NPS and 10% along with an additional 8.5% of the employees’ corpus under UPS. 

OPS Revival Requests by States and Employees 

Central employee unions continue to urge for OPS restoration, citing assured retirement benefits. Meanwhile, Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh have informed the Pension Fund Regulatory and Development Authority (PFRDA) about their decision to implement OPS for their respective state government employees. 

However, as per the PFRDA Act, 2013, and its regulations, the accumulated corpus under NPS — including government and employee contributions and returns — cannot be refunded back to the state governments. 

Read More: PFRDA Expands Investment Scope: Pension Funds Can Now Invest in Gold and Silver ETFs! 

Unified Pension Scheme Payout Rules 

Under the UPS, employees with at least 25 years of service will receive an assured monthly payout of 50% of their average basic pay from the last 12 months. For service periods between 10 to 25 years, the payout is proportionate.  

Additionally, a family payout of 60% of the employee’s assured pension is granted to the spouse post demise, and a minimum assured payout of ₹10,000 monthly is applicable after 10 years of service. Other benefits include inflation indexing and a gratuity-based lump sum payment at superannuation. 

Conclusion 

The Finance Ministry has stated there is no plan to revert to the OPS for central employees under NPS and UPS. Employee contributions under these schemes will remain non-refundable once payout commences, as per current PFRDA regulations. 

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