In the year 2004, a new pension scheme (NPS) was introduced by the government for the employees. After the introduction of the new pension scheme, the old pension scheme (OPS) was abolished. Instead of the government’s new pension scheme, government employees are demanding the resumption of the old pension scheme.
SBI Pension Services Portal
After all, what is the difference between OPS and NPS and how are these two schemes different from each other? You will be given their information in this article. In the article, you will be able to understand the special features of the old pension scheme. So let’s know about OPS and NPS in simple language.
What is OPS and NPS, know complete information from here
OPS, which we know by the name of Old Pension Scheme / Old Pension, under this, 50 percent of the amount of his last salary was paid as pension to the government employees at the time of their retirement. According to the actual employees (Old Pension Scheme) Old Pension Scheme, New Pension Scheme (New Pension Scheme) According to is more correct. For the employees by the government in the year 2004 New Pension Scheme (NPS) was started.
Key Highlights of OPS and NPS
| Full name of OPS | Old Pension Scheme |
| Full name of NPS | New Pension Scheme |
| Launch of NPS | 1 April 2004 |
| Facility | There is no facility of General Provident Fund (GPF) in NPS. GPF (General Provident Fund) facility in OPS |
| NPS is based | stock market based |
| Guarantee | New Pension Scheme no guaranteed pension in Guaranteed fixed pension up to 50% of basic salary in Old Pension Scheme |
Old Pension Scheme (OPS)
In the old pension scheme, the service time period of the government employee had no effect. Along with the increase in dearness allowance in OPS, there was also an increase in salary when the pay scale was implemented. Not only this, in the old pension scheme, on the death of the pension holder employee, his family (wife or other dependent) was provided pension amount. For these reasons, there is a demand by the employees to restart the Old Pension Scheme.
New Pension Scheme (NPS)
In the same year 2004, the General Provident Fund (GPF) has been discontinued due to the implementation of the new pension scheme. Both the employee and the employer used to invest 12-12 percent in GPF. In the new pension scheme, 10 percent of the basic salary and DA of the employees is deducted and the same percentage is invested by the employer.
New Pension Scheme 10 percent of the basic pay and DA of the employees in Old Pension Scheme is 2 percent less than GPF. Employees get less benefits in the new pension scheme. This scheme provides investment approval to the employees.
Difference between old pension and new pension scheme
| Old Pension Scheme (OPS) | New Pension Scheme (NPS) | |
| Facility | In the old pension scheme, employees get the facility of GPF (General Provident Fund). | New Pension Scheme (NPS)Employees are not given the facility of GPF (General Provident Fund). |
| deduction | In the old pension scheme (OPS), there is no deduction from salary for pension. | In NPS i.e. New Pension Scheme, 10% (Basic +DA) is deducted from the salary of the employee. |
| based | Old Pension Scheme is a secure pension scheme for the employees. This pension is paid by the treasury of the government. | While the New Pension Scheme (NPS) is based on the stock market, that is, in this scheme, the employees are paid only on the basis of market movements. |
| allowance | In the old pension scheme OPS, Dearness Allowance (DA) is applicable for the employees after 6 months. | Whereas New Pension Scheme (NPS) Dearness Allowance (DA) is not applicable after 6 months. |
| Guarantee | In OPS, 50 percent of the last basic pay/salary is received as fixed pension during the retirement of the employee. | Unlike OPS, in NPS there is no guarantee of the employee getting a fixed pension at the time of retirement. |
| gratuity | Employees in OPS get gratuity of up to Rs 20 lakh after retirement. | There is no permanent provision of gratuity at the time of retirement in NPS. |
| tax | On the retirement of the employee in OPS, he does not have to pay any kind of income tax on the interest of GPF. | Unlike OPS, in the new pension scheme, whatever money you get on retirement according to the stock market, you have to pay tax on it. , |
get like this Lump sum money and pension in NPS
The New Pension Scheme is subject to market risk. The old pension scheme is considered better by the employees. The service period of the employees has an impact in the new pension scheme. Under this new scheme, the employees can get 60 percent of the total accumulated amount on their retirement. The remaining part i.e. 40 percent amount has to be used to buy the annuity plan of the company and the interest received on it is given as pension to the employee every month. that is, you can think of it as NPS The pension you get will depend on the amount of annuity.
The new pension scheme was started from 1 April 2004.
No ! The facility of General Provident Fund has not been given in the new pension scheme.
NPS New Pension Scheme is stock market based.
Employees are provided a fixed pension of up to fifty percent of the last basic pay at the time of retirement under the Old Pension OPS.
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