Historical background of the old pension scheme
In this context, the Old Pension Scheme (OPS) has been one of the key structures of the social security system of India that developed a reliable pension structure for government employees until it was ceased in 2004 and replaced by the National Pension System (NPS).
Nevertheless, the change brought controversies, which made employees with preferences toward the prior version, referred to as OPS, nervous about the permanent barring of the scheme.
The government’s decision to reinstate OPS
At the beginning of the year, in 2020, the Indian government, led by Prime Minister Narendra Modi, made a rather large-scale decision to restore the OPS. This action has been taken at a time when different segments, especially retired workers, have called its predecessor, the NPS, less favorable because of its market-related returns and associated risks.
Effect on the Economic Vulnerable Employees
This is in terms of relieving the distressed employees who constitute a collapsed welfare state, as earlier expected to be accomplished by the reintroduction of OPS. These individuals, who normally are not wealthy or have other assets such as cash or other securities, have for many years relied on OPS’s stable returns to finance their retirement.
Compared to the Atal Pension Yojana Online (APY)
While the APY is another initiative launched in 2015 that has been specifically crafted to go after the unorganized sector workers who were hitherto missing formal pension schemes, APY is funded by compulsory contributions made during the working population’s working age to provide pension benefits that are defined by contribution level and age of entry; the government makes a co-contribution to APY for certain subscribers.
The vision of the government towards social security
Thus, the relaunch of OPS corresponds to the government’s long-term social policy agenda as part of the welfare state. It is to meet the challenges of responding to the requirements of retired workers who, in the absence of a reliable pension, can find themselves destitute.
Eligibility and Application Process
The participants in OPS are usually civil servants serving the government, those who were registered to participate in the scheme before its radical shift, and other employees who decided to transfer from the NPS. The phase includes a number of bureaucratic procedures, for instance, checking the employment records, changing the personal information, and choosing the options for receiving pension payments.
