The old pension scheme has become a big issue politically in the country. Once again a fresh debate has started regarding this plan. On one hand, many states of the country have announced to implement the old pension scheme. So now the Guaranteed Pension Scheme of the Jagan Mohan Reddy government is also in discussion in Andhra Pradesh.
What is Reddy government’s Guaranteed Pension Scheme
Under this scheme, if an employee deposits 10 percent of his basic salary every month. So he will get guaranteed 33 percent pension. In the Guaranteed Pension Scheme, 10 percent will be deposited by the state government. Apart from this, if the employee deposits 14 percent of his salary, he will be given a guaranteed pension of 40 percent.
Not allowed to execute the plan
Now let us understand what is the old pension scheme
The old pension scheme ie OPS was abolished by the BJP led government in December 2003 under the rule of late Atal Bihari Vajpayee. After this it was replaced by National Pension Scheme-NPS. NPS became effective from April 1, 2004.
In the old pension scheme, the pension was 50 percent of the last salary of the employee and the government used to pay this entire amount. To understand in simple language, till 2004 or before, any government employees were given pension every month after retirement and this amount was half of their salary at the time of retirement.
In the old pension scheme, after the death of the employee after retirement, the amount of pension was given to his family members. In 2014, the Modi government changed this by passing a bill and implemented the National Pension Scheme (NPS).
What is National Pension Scheme
National Pension System is a long term investment plan. NPS This is a type of contributory pension scheme. Under which the employee gets a big fund together on retirement. People investing in the NPS scheme can avail a deduction of Rs 50,000 under Section 80-CCD (1B) of the Income Tax Department and Rs 1.5 lakh under Section 80-C of the Income Tax Department.
Now let us understand the difference between OPS and NPS
- In the old pension scheme, there was no deduction from salary for pension, while for taking NPS, employees have to deduct 10% (Basic+DA) from salary.
- In OPS The government had to pay from its side, in NPS the payment is made on the basis of profit from the stock market.
- The OPS had a provision for graduation up to about 20 lakhs after retirement, NPS has a temporary provision of graduate.
Which states announced OPS
At present, the debate has started again in the whole country regarding OPS. Four non-BJP ruled states of the country have announced to restore the old pension scheme.
Chhattisgarh became the first state to announce OPS. Chhattisgarh Chief Minister Bhupesh Baghel had announced to restore the old pension in his budget speech in March 2022, after which Jharkhand and Rajasthan also announced to return to the old pension scheme.
Punjab is the fourth state in the country which talked about restoring OPS. There this announcement was made by the CM of your government Bhagwant Mann has done it. He also said that he has directed the Chief Secretary of the state to work out the possibility of modus operandi to implement the OPS again.
Will OPS increase the tension of BJP before 2024?
There are about 2 crore 25 lakh government employees in the country. In such a situation, the old pension scheme can become a major election issue before the 2024 Lok Sabha elections. Before the Lok Sabha elections, assembly elections are also going to be held in many states of the country. There are also more number of government employees. In such a situation, it is believed that OPS will become a major election issue.