{"id":34832,"date":"2022-11-17T04:42:55","date_gmt":"2022-11-16T23:12:55","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=34832"},"modified":"2025-04-20T17:41:41","modified_gmt":"2025-04-20T12:11:41","slug":"with-elections-due-in-gujarat-aap-and-congress-promise-a-return-to-old-pension-scheme","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/with-elections-due-in-gujarat-aap-and-congress-promise-a-return-to-old-pension-scheme\/","title":{"rendered":"With Elections Due in Gujarat, AAP and Congress Promise a Return to Old Pension Scheme"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>About OPS (Purpose, Features, Drawbacks)<\/strong><\/li>\n<li><strong>About NPS (Purpose, Features, Benefits, Comparison with OPS)<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>With elections for the 182-member Gujarat Assembly to be held in December, the Aam Aadmi Party (AAP) and Congress are attempting to halt the BJP\u2019s 27-year rule in the state with a range of poll promises.<\/li>\n<li>One such promise is the restoration of the Old Pension Scheme (OPS).<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>About Old Pension Scheme (OPS):<\/strong><\/h2>\n<ul>\n<li>OPS offers pensions to government employees on the basis of their last drawn salary.\u00a0<strong>50% of the last drawn salary<\/strong>.<\/li>\n<li>The attraction of the Old Pension Scheme or \u2018OPS\u2019 lay in its promise of an assured or \u2018defined\u2019 benefit to the retiree. It was hence described as a \u2018<strong>Defined Benefit Scheme<\/strong>\u2019.<\/li>\n<li>To illustrate,\u00a0<u>if a government employee\u2019s basic monthly salary at the time of retirement was Rs 10,000, she would be assured of a pension of Rs 5,000<\/u>.<\/li>\n<li>Also, like the salaries of government employees,\u00a0<u>the monthly pay-outs of pensioners also increased with hikes in dearness allowance or DA announced by the government for serving employees<\/u>.<\/li>\n<li>The OPS was discontinued by the Central government in 2003.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>What were the concerns with OPS?<\/strong><\/h2>\n<ul>\n<li>The main problem was that the pension liability remained unfunded \u2014 that is,\u00a0<strong>there was no corpus specifically for pension<\/strong>, which would grow continuously and could be dipped into for payments.<\/li>\n<li>The Government of India budget provided for pensions every year; there was no clear plan on how to pay year after year in the future.<\/li>\n<li>The \u2018pay-as-you-go\u2019 scheme created\u00a0<strong>inter-generational equity issues<\/strong>\u00a0\u2014 meaning the present generation had to bear the continuously rising burden of pensioners.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>About New Pension Scheme (NPS):<\/strong><\/h2>\n<ul>\n<li>As a substitute of OPS, the NPS was introduced by the Central government in\u00a0<strong>April, 2004<\/strong>.<\/li>\n<li>This pension programme is open to employees from the\u00a0<strong>public<\/strong>,\u00a0<strong>private<\/strong>\u00a0and even the\u00a0<strong>unorganised<\/strong>\u00a0<strong>sectors<\/strong>\u00a0except those from the armed forces.<\/li>\n<li>The scheme encourages people to invest in a pension account at regular intervals during the course of their employment.<\/li>\n<li>After retirement, the subscribers can take out a certain percentage of the corpus.\n<ul>\n<li>The beneficiary receives the remaining amount as a monthly pension, post retirement.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Nodal agency:<\/strong>\u00a0Pension Fund Regulatory and Development Authority (PFRDA)<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Eligibility:<\/strong><\/h2>\n<ul>\n<li>Any Indian citizen\u00a0<strong>between 18 and 60 years<\/strong>\u00a0can join NPS.<\/li>\n<li><strong>NRIs<\/strong>\u00a0(Non-Residential Indians) are also eligible to apply for NPS.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Permanent Retirement Account Number (PRAN):<\/strong><\/h2>\n<ul>\n<li>Every NPS subscriber is issued a card with\u00a0<u>12-digit unique number<\/u>\u00a0called Permanent Retirement Account Number or PRAN.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Minimum contribution in NPS:<\/strong><\/h2>\n<ul>\n<li>The subscriber has to contribute a minimum of\u00a0<strong>Rs. 6,000 in a financial year<\/strong>.<\/li>\n<li>If the subscriber fails to contribute the minimum amount, his\/her account is frozen by the PFRDA.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Who manages the money invested in NPS?<\/strong><\/h2>\n<ul>\n<li>The money invested in NPS is managed by PFRDA-registered Pension Fund Managers.<\/li>\n<li>At the moment, there are eight pension fund managers.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Difference between NPS and OPS:<\/strong><\/h2>\n<ul>\n<li>The Old Pension Scheme is a pension-oriented scheme. It offers regular pensions to employees during retirement. The pension amount is 50% of the last drawn salary by the employee.\n<ul>\n<li>Thus, in OPS,\u00a0<strong>the pension amount is constant<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li>On the other hand, the National Pension Scheme is an investment cum pension scheme.<\/li>\n<li>NPS contributions are invested in market-linked securities, i.e., equity and debt instruments.\n<ul>\n<li>Therefore,\u00a0<strong>NPS doesn\u2019t guarantee returns<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li>However, the investments, in NPS, are volatile and hence have the potential to generate significant returns.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>OPS offers pensions to government employees on the basis of their last drawn salary.<\/p>\n","protected":false},"author":5,"featured_media":34833,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-34832","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=34832"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34832\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/34833"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=34832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=34832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=34832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}