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The Centre has restored the non-contributory and guaranteed Old Pension Scheme, in place of the contributory National Pension System, for central government employees.
The reinstatement applies to employees hired on or after January 1, 2004
Pension Scheme - Challenges & Measures
Pension schemes globally, including India's, face a crisis due to factors like aging populations and financial pressures.
The cost of pensions is substantial, with Indian states and territories spending between 6%-21% of their revenue on pensions.
This has led to fiscal challenges.
To manage costs, the government is using measures like
contract-based jobs,
short service schemes (e.g., Agnipath),
leaving positions unfilled
These impacts government services and job opportunities.
The New Pension Scheme (NPS), introduced during a stock market boom, has resulted in lower pensions for retirees compared to the old scheme
A new Unified Pension Scheme (UPS) has been approved, offering a pension of 50% of the average basic pay from the last 12 months before retirement
with a minimum pension of ₹10,000, with increased government contribution to 18.5%.
This aims to balance fiscal responsibility and employee benefits.
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