8th Pay Commission: Central govt employees want old pension back – but can India afford it?
Demanding for OPS, All India NPS Employees Federation (AINPSEF) said in its memorandum, it provides “social security” and financial stability after retirement.
Under OPS, retired employees receive a guaranteed pension linked to their last drawn salary along with Dearness Allowance (DA) protection. (Pexels Photo)
Government employee unions have long advocating for Old Pension Scheme ( OPS) by scrapping the National Pension System ( NPS). The debate has once again resurfaced in discussions around the 8th Pay Commission and even union bodies has acknowledged that a complete rollback of NPS and a return to OPS may not be possible.
What is OPS?
OPS in India is a government-funded retirement plan that guarantees a fixed monthly pension for life. Under OPS, retired employees receive a guaranteed pension linked to their last drawn salary along with Dearness Allowance (DA) protection.
Why employee unions want to return back to OPS?
Demanding for OPS, All India NPS Employees Federation (AINPSEF) said in its memorandum, it provides “social security” and financial stability after retirement.
And, this gives retirees predictable post-retirement income and protection against inflation.
Under OPS, employees receive “50% of last basic salary plus DA as pension after superannuation”. On the other hand, NPS is market-linked and does not guarantee a fixed pension amount.
According to the AINPSEF memorandum, NPS leaves retirement income uncertain as pension payouts depend on the accumulated corpus. Hence, some employees receiving very low pensions, particularly those who entered regular government service later
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The memorandum claimed that in certain cases, pensions under NPS have ranged between “ ₹200 to ₹2,000 per month”
Why it is going back to OPS completely is difficult?
After nearly 20 years of NPS, employee and government contributions worth over ₹16.5 lakh crore have accumulated in the system. As a result, any move to completely scrap NPS and return to OPS would involve significant financial costs and complex administrative and market-related challenges.
The NPS corpus is invested through institutions such as LIC, SB I, UTI and other government-linked financial entities. “If this money is withdrawn suddenly, then first of all it becomes difficult because it is invested in different places. Secondly, the value of the money can also get affected,” Dr Manjeet Singh Patel, National President of the All India NPS Employees Federation and National Mission for Old Pension Scheme Bharat told India Today.
Also, “if NPS is scrapped completely, then this investment flow will stop. It can negatively affect liquidity in the market and financial institutions.”
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8th CPC crosses six months
Chaired by former Supreme Court Justice Ranjana Prakash Desai, and comprising members Pankaj Jain, former IAS, as Member-Secretary, and Professor Pulak Ghosh, tenured Professor of Finance, Member of the Economic Advisory Council to the Prime Minister, as a Member of the Commission; the 8th CPC has crossed six months since its process began in November 2025.
About 50 lakh central government employees, including defence personnel, and around 65 lakh retired central government pensioners, including defence retirees, are set to be impacted by the 8th CPC's decisions.
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