Finance Ministry Response on OPS Restoration and UPS Features in Lok Sabha

The Ministry of State in the Ministry of Finance (Shri Pankaj Chaudary) has responded to a question raised in Lok Sabha (the lower house of India’s Parliament) by Shri Sudama Prasad and Shri Utkarsh Verma Madhur regarding “Restoration of Old Pension Scheme“. Lok Sabha responded to the questions on Monday, August 11, 2025.

Below are the questions raised by Shri Sudama Prasad and Shri Utkarsh Verma Madhur:

a) whether the Government proposes restoring the Old Pension Scheme (OPS); if so, the details thereof; and if not, the reasons therefor, along with the reasons for introducing UPS;

b) whether the Government is aware of non-feasibility of the New Pension Scheme and if so, the details thereof.

c) the reasons for excluding an unemployed son, an unmarried/widowed/divorced daughter and dependent parents from the definition of family in UPS; and

d) the reasons for the reduced pension in UPS as compared to OPS and the declaration of UPS only through a Press release.

In response to the questions, the ministry of finance (Smt Nirmala Sitharaman) says:

(a) to (c) FM states that there is no proposal under deliberation of the Government of India for restoration of the Old Pension Scheme (OPS) regarding Central Government employees covered under the National Pension System (NPS). The Government had shifted away from OPS because of its unjustifiable fiscal liability on the Government exchequer. NPS is a defined contribution retirement savings scheme in India which was mainly launched for Central Government employees joining service on and after January 1, 2004, other than armed forces. Its main objective of the NPS was to enhance upon the pensionary benefits for such employees and a Committee was incorporated under the chairpersonship of the finance Secretary to recommend measures to modify the NPS. According to the consideration of the Committee with stakeholders, the Unified Pension scheme (UPS) has been introduced as an option under the NPS with the objective of giving benefits after retirement to the Central Government employees.

The characteristics of UPS, such as the definition of family, have been created in such a way to make sure the transaction of assured payouts while also maintaining the fiscal sustainability of the fund.

She also added that, the Government employees who choose UPS under NPS will also be entitled for the option of benefits under the CCS Pension Rules, 2021 or the event of the death of the Government servant during service on the grounds of invalidation or disablement (in the CCS Extraordinary pension Rule, 2023).

d) UPS has been launched through a notification by the Government on January 24,2025, as an option under NPS. assured payout is allowed on retirement at 50% of twelve monthly average basic pay immediately before retirement after a minimum of 25 years of qualifying service Under UPS. and in the instance of a lesser qualifying service period, a balanced payout would be allowable.