Central Govt Employees Now Get a One-Time Option to Apply for Old Pension Scheme

The Centre's major directive provides a one-time choice for a restricted group of central government employees to opt for the previous pension system.

Employees who joined the central government services against posts advertised or notified before December 22, 2003, the day the National Pension System (NPS) was notified, are eligible to join the old pension scheme under the Central Civil Services (Pension) Rules, 1972 (now 2021), according to the latest notification by the Ministry of Personnel.

This option is available to a small set of government employees through August 31, 2023. The choice, if exercised, will be final, according to the ministry.

As stated in the statement, the action was made in response to different representations/references and court decisions in this regard.

"Representations have been received from government employees appointed on or after January 1, 2004, requesting an extension of the Central Civil Services (Pension) Rules, 1972 (now 2021) pension benefit on the grounds that their appointment was made against the posts/vacancies advertised/notified for recruitment prior to notification for the National Pension System, referring to court judgements of various Hon'ble High Courts and Hon'ble Central Administrative Tribunals,"

The decision was made, according to the ministry, following discussions with the Department of Financial Services, Department of Personnel & Training, Department of Expenditure, and Department of Legal Affairs the decision was taken.

The order stated: "It has been decided that, in all cases where the central government civil employee has been appointed against a post or vacancy which was advertised/notified for recruitment/appointment, prior to the date of notification for National Pension System, i.e., 22.12.2003, and is covered under the National Pension System on joining service on or after 01.01.2004, may be given a one-time option to be covered under the CCS(Pension) Rules, 1972 (now 2021).”

The order said that employees of the government who are entitled to exercise the option "but who do not exercise this option by the stipulated deadline" will still be covered by the National Pension System.

Depending on the choice selected by the government employee, the issue of coverage under the CCS (Pension) Rules, 1972 (currently 2021), should be addressed before the appointing authority.

According to the Ministry of Personnel, if the government employee meets the criteria for coverage under the CCS (Pension) Rules, 1972 (currently 2021), the relevant order in this respect must be issued at the earliest by October 31, 2023.

It should be emphasised that starting on December 31, 2023, such government employees' NPS accounts would be closed.

More than 14 lakh employees of the state and central governments are represented by the National Movement for Old Pension Scheme (NMOPS), which has applauded the government's decision.

Manjeet Singh Patel, the head of NMOPS Delhi, stated “it is good news for the eligible central government employees. We once again request that the central government amend the current NPS so that all central government employees can benefit from the old pension plan.”

What are OPS and NPS?

Employees get defined pension benefits under the Old Pension Scheme (OPS). An employee is eligible for a pension equal to 50% of the final salary withdrawn.

The NDA government ended OPS on April 1, 2004, with effect from that date.

Whereas under the New Pension Scheme (NPS), the government contributes 14% and employees contribute 10% of their basic pay to their pension.