Old Pension Scheme: Here's why the Government won’t bring back the OPS

The Ministry of Finance has clarified that there is no proposal to restore the Old Pension Scheme (OPS) for Central Government employees who are covered under the National Pension System (NPS). This was in response to multiple questions raised in the Lok Sabha on August 11, 2025.

"In light of various Court judgments, the Government had issued instructions vide OM No. 57/05/2021-P&PW(B) dated 03.03.2023, giving one-time option to those Central Government civil employees for inclusion under the CCS (Pension) Rules, 1972 (now 2021) who have been appointed against the posts or vacancies which were advertised/notified for recruitment/appointment prior to date of issuing of notification of National Pension System i.e. 22.12.2003," said Minister of State For Finance Pankaj Chaudhary.

However, this benefit is exclusively available to public servants employed by the Central Government, and the Ministry affirmed that no proposal to extend OPS to workers at Public Sector Banks (PSBs) or Public Sector Undertakings (PSUs) is currently being considered.

Pankaj Chaudhary further explained that workers who joined SBI on or after August 1, 2010, are ineligible for the old pension plan, and the old pension will not be applicable to them in accordance with the State Bank of India workers’ Pension Fund Regulations, 2014.

"There is no proposal under consideration of the Government of India for restoration of Old Pension Scheme (OPS) in respect of Central Government employees covered under National Pension System (NPS). The Government had moved away from OPS due to its unsustainable fiscal liability on the Government exchequer," said Finance Minister Nirmala Sitharaman.

The scheme also allows employees to opt for benefits under the CCS (Pension) Rules, 2021 or CCS (Extraordinary Pension) Rules, 2023, in case of death or disablement during service. UPS is designed to ensure fiscal sustainability while offering improved post-retirement security, the Finance Minister added.

Responding to Unstarred Question No. 3454, the Government addressed the demand from certain State Governments for a refund of the pension corpus accumulated under NPS after they decided to revert to OPS.

The Finance Ministry categorically stated that there is no provision under the PFRDA Act, 2013, or related regulations, that allows for refund of NPS contributions back to the State Governments.

As of July 31, 2025, five states—Rajasthan, Punjab, Chhattisgarh, Jharkhand, and Himachal Pradesh—have officially informed the Pension Fund Regulatory and Development Authority (PFRDA) of their reversion to OPS.