The Old Pension Scheme (OPS) is one of the most controversial issues in India as government employees enjoy the tag of guaranteed pensions. With the year 2025, the world of pensions is transiting, as the OPS is oozing with the ambivalence of the past and the Unified Pension Scheme, (UPS) a new development which pioneers changes in the pensions sphere. This article takes a plunge into the current developments to provide insight on the evolving situations of retirement and the reasons behind the same.
A Summary On The Old Pension Schemecovered
The OPS, implemented prior to 2004 guaranteed government workers a fixed monthly pension- 50 percent of the last drawn salary, revised every year to keep up with inflation. It was sustainable yet it gave a burden to government finances as it was not funded. This was scrapped by the introduction of the National Pension System (NPS) in 2004 which is a market-linked, contribution-based system that is not popular with employees that want certainty in their life.
No OPS Revival Across the Nation
Finance Minister Nirmala Sitharaman, in August 2025, categorically said, during the Monsoon Session of Parliament, to journalists that the central government is not thinking of bringing back OPS to the employees of NPS. The reason? The fiscal impact of the OPS was rated as unsustainable by finance ministers since guaranteed payouts threaten to have long-term implications on the exchequer. Such a position has angered many central government employees who have been hoping for a roll back.
Unified Pension Scheme Game-Changer
In response to the NPS concerns, the government announced the Unified Pension Scheme on January 24, 2025 and it has commenced successively since April 1 the same year. The UPS has the benefits of OPS and stability of NPS with regards to pension since the final pension is 50 percent of the average basic wages during the last 12 months of service for those with 25 years of service. It also guarantees monthly pension of at least 10, 000 rupees which is a rescue to the retired. The UPS is funded with an equal amount to the OPS, but since it is fully funded, this promotes the security of employees on the one hand and financial resources on the other.
OPS Restorations At State-level
At least Punjab and Himachal Pradesh have re-introduced the OPS to their employees in 2025, in response to calls to secure retirement. These relocations, though popular, add financial burden on the state-budgets. Central labour unions have also been pressing towards a nationalised hybrid model but the central government has maintained its focus on the UPS.
Delhi, QPHA Old-Age Pension Scheme
In 2025, Delhi has 5.3 lakh individuals benefitting under the scheme of Old Age Pension, and 80,000 new openings have been created. It pays 2,000 rupees to 2,500 rupees a month, but has proposed an increase to 2,500 to 3,000 rupees that is yet to be approved. The other benefit being contemplated is a 5000 rupee pension to the differently-abled seniors but executed.
Where To Internalized Guild?
The pension discourse consists of a pull of worker security and financial responsibility. The UPS is a compromise, but 32,000 of 2.3 million eligible employees taking advantage of the benefit by August 2025 is relatively few. Retirees and employees are waiting to have more information as the Union Budget 2026 approaches.
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