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Centre Says No Plan To Revert To OPS, Says Law Does Not Permit Refund Of NPS Corpus To States
Various central government employee associations have demanded restoration of the Old Pension Scheme (OPS). It was discontinued for employees joining on or after January 1, 2004
Dec 24, 2025 · 2 min read
Even as several central government employees’ organisations have been agitating and protesting to demand restoration to the Old Pension Scheme (OPS), the Centre has made it clear in no uncertain terms that there is no “such proposal or plan” and also asserted that in case of a few states, where OPS has been restored, “law does not permit to refund the contributory fund generated under the National Pension System (NPS) or the Unified Pension Scheme (UPS)”.
Quoting Minister of State (MoS) for Finance, Pankaj Chaudhary, the Ministry of Finance in a statement said that the government “does not propose the restoration of the OPS in respect of central government employees covered under the NPS or the UPS”.
In view of a few of the states restoring the OPS for their employees, the Finance Ministry asserted that “refund of the NPS corpus to such states is not permitted under existing law”.
According to the Finance Ministry statement, the state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have informed the Pension Fund Regulatory and Development Authority (PFRDA) about their decision to restart the OPS for their state government employees.
However, there is “no provision under the PFRDA Act, 2013 read along with PFRDA (Exits and Withdrawal under the NPS) Regulations, 2015, and other relevant regulations, vide which the accumulated corpus of the subscribers viz Government contribution, employees’ contribution towards NPS along with accruals, can be refunded and deposited back to the state government”.
Various central government employee associations have steadfastly been demanding restoration of the OPS, which is a non-contributory assured pension framework under the Central Civil Services Pension Rules, 1972 (now 2021).
The OPS, which was discontinued for employees joining on or after January 1, 2004, provided assured, non-contributory pensions under the pension rules.
In contrast, the NPS and the UPS are contributory schemes where employees contribute 10% of their basic pay and dearness allowance (DA). The government contributes 14% under the NPS and 10% along with an additional 8.5% of the employees’ corpus under the UPS.
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.
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