HIGHLIGHTS-
- Chhattisgarh CM Bhupesh Baghel announced the restoration of the old pension scheme (OPS) for government employees.
- Chhattisgarh becomes the second state to restore the old pension scheme.
- The state budget 2022-23 was focused on rural, employment, farmers, and service sectors.
The old pension system will be restored for government employees in Chhattisgarh. Chhattisgarh becomes the second state to restore the old pension scheme. More than 3 lakh government employees hired after January 1, 2004, will benefit from the implementation of the old pension scheme in Chhattisgarh. Before Chhattisgarh, Rajasthan was the first state to take this step.
Chhattisgarh Chief Minister Bhupesh Baghel announced the restoration of the old pension scheme (OPS) for government employees during the budget for the year 2022-2023. The state budget 2022-23 was focused on rural, employment, farmers, and service sectors.
New pension scheme to replace the old pension scheme
For employees hired on or after January 1, 2004, the state budget for the fiscal year 2022-23 declared that the New Pension Scheme (NPS) would be replaced by the old pension scheme. Chhattisgarh is the second state to reintroduce the old pension scheme for government employees after Rajasthan that provides an assured income after retirement.
Why Old pension scheme was removed?
Except for the Defense Forces, it was announced that the new pension scheme will be implemented in place of the old pension scheme during the Atal Bihari Vajpayee government. Those who began working for the government after April 1 2004 were required to contribute a portion of their salaries to the New Pension Scheme. The new pension scheme was introduced by the central government, although it was not mandated for the states. The majority of states embraced it, but after a short period, state employee organizations began to oppose the new pension scheme, and a demand was made to reinstate the previous pension scheme.
OPS (Old Pension) Vs NPS (New Pension)
- There is no deduction from salary for pension in Old Pension Scheme, whereas 10% (Basic + DA) is deducted from the salary of the employee in the New Pension Scheme.
- The old pension scheme has the facility of the GPF General Provident Fund, while the facility of the General Provident Fund (GPF) has not been added to the new pension scheme.
- The Old Pension Scheme is funded by the government’s treasury thus it is safe and secure, whereas the new pension scheme is based on the stock market.
- Fixed pensions of up to 50% of the last basic salary were available under the old pension program at the time of retirement. In the New Pension Scheme, there is no assurance of a set pension upon retirement.
- After retirement, the former pension scheme offered a gratuity of up to Rs 20 lakh. In the New Pension Scheme, there is a provision for a temporary gratuity at the time of retirement.
- In the former pension scheme, there is no income tax on GPF interest. The money earned on the stock market will have to be taxed when you retire under the New Pension Scheme.
