NPS vs OPS news: Amid the ongoing tussle between the Centre and some states over the rollback of the New Pension Scheme (NPS) and re-implementation of the Old Pension Scheme (OPS) for Government Employees, the Central Government may tweak the NPS rules to offer assured 40% to 45% pension to Government employees, according to a report.

Several Opposition-ruled states have been demanding the rollback of the New Pension Scheme. In fact, some recent state elections have been fought on this plank. In response to the rising demand for the rollback of NPS, the Government recently set up a four-member panel to review NPS. The panel was set up to suggest measures to improve upon the pensionary benefits of Government employees covered under the NPS. (read more details about the panel here)

Now it is reported that instead of bringing OPS back, the Central Government is planning to introduce assured pension under the existing NPS scheme. The Central Government may tweak the market-linked New Pension Scheme (NPS) under National Pension System to offer assured pensions to Government employees, as per a report.

According to the report by news agency Reuters, the Government may assure a minimum pension of 40% to 45% of the last drawn pay to employees. To do this, the Government may alter the current market-linked pension scheme.

As of now, NPS requires employees to contribute 10% of their basic salary and the government contributes 14%. However, the final payout/corpus depends on the market-based returns on that corpus, which is mostly invested in Government debt securities.

Also Read: Best NPS Pension Fund Managers in 10 years: Equity Scheme

The NPS has been applicable to employees who joined the government service from 1 April 2004.

Compared to the NPS, the Old pension scheme guaranteed a fixed pension of 50% of an employee’s last drawn pay.

According to the report, the Government is expected to amend the current scheme so that while both employees and the Government will contribute, the employees will be able to get an assured 40% to 45% of their last drawn salary as a pension.

However, the Government is not planning to go back to the old pension system, as per the report which quoted two Government officials.

The officials quoted in the report said that under the current NPS, employees get around 38% of their last salary as a pension. In case the Government guarantees a 40% return, it will have to cover only a 2% shortfall. However, the Government expense will increase if the market-linked returns decline anytime in future.