Punjab cabinet approves implementation of old pension scheme

CHANDIGARH: The Punjab cabinet has approved the restoration of Old Pension Scheme.

The decision has been taken in a cabinet meeting on Friday. An official notification would be put out subsequently. Faced with several demands from government employees, the Punjab government took the decision to restore the Old Pension Scheme.

This will directly benefit more than 1.75 lakh employees currently covered under NPS. In addition to this, 1.26 lakh employees are already covered under the existing OPS.

Earlier, Rajasthan, Chhattisgarh and Jharkhand too went back to the Old Pension Scheme and quashed the new pension scheme.

Under the old pension scheme, a government employee is entitled to a monthly pension after retirement. The monthly pension is typically half of the last drawn salary of the person.

Under the new pension scheme, employees contribute a portion of their salaries to the pension fund. Based on that, they are entitled to a one-time lump sum amount on superannuation.

For the record, the old pension scheme was discontinued in December 2003, and the new pension scheme came into effect on April 1, 2004. 

The scheme is aimed at safeguarding the future of government employees and recognising their contribution towards the state. In order to ensure that the scheme being introduced is financially sustainable for the exchequer in the future also, the government will be contributing proactively towards the creation of a pension corpus which will service the pension in future to the beneficiaries of the scheme.

This contribution towards the pension corpus will be Rs 1,000 crore per annum initially and will gradually increase in future.

Besides, the current accumulated corpus with NPS is Rs 16,746 crore for which the state will request the Pension Fund Regulatory and Development Authority of the government of India to refund this amount for effective utilisation at its end.

(With Inputs from ANI, IANS)