JOURNEY TO THE CENTER OF THE PENSION WORLD IN INDIA: FROM OPS TO NPS TO UPS 0 0

Abstract

Indian pension regime is a step towards financial empowerment for citizens of India who have served the nation and have made significant contributions towards economy during their heyday. It is an assurance that in their old age pensions shall secure their financial future post-retirement. The current paper aims to study Pension timeline introduced in India, following pathway from Old Pension Scheme (OPS) introduced in 1950s to National Pension System (NPS) introduced in 2004 and a step further towards implementation of Unified Pension Scheme (UPS) in the year 2025. Examining the pros and cons, it aims to provide insights into evolving landscape of Pension world in India. OPS, exclusively designed for government employees, assured a fixed amount of pension on a monthly basis. This scheme provided certainty in returns to retired employees by calculating monthly pension based on their last salary. However, due to specific limitations in system, Government discontinued OPS and transitioned to NPS. Genesis of NPS can be traced back to a report from Old Age Social and Income Security project, commissioned by Ministry of Social Justice and Empowerment in 1998. Pension Fund Regulatory and Development Authority regulates and administers NPS under PFRDA Act, 2013. It is a market-linked defined contribution scheme. Union cabinet has approved Unified Pension Scheme to be implemented for government employees w.e.f April 1, 2025 that assures retiree a pension equivalent to 50% of her average salary.