In August 2025, Finance Minister Nirmala Sitharamen denied any intention of reviving the Old Pension Scheme (OPS) of central government workers under the National Pension System (NPS). The fiscal burden on the OPS renders it not sustainable to the advantage of the Unified Pension Scheme (UPS).
Unified Pension Scheme Introduced.
The UPS, which will go into effect on April 1, 2025, will provide a guaranteed 50 percent of the final drawn salary as pension to those employees who have 25-year service. In contrast to the unfunded OPS, UPS needs 10 percent employee and 18.5 percent government contributions.
Why OPS Was Phased Out
The OPS, which was substituted by NPS in 2004 ensured 50 percent of end salary without contributions by the employees, which burdened government budgets. States such as Rajasthan or Himachal revived OPS, however, the Centre focuses on fiscal stability using UPS.
UPS Enrollment Progress
Slow adoption by August 2025, only 32,000 out of 2.3 million eligible employees of the NPS had selected UPS. It gives the employees the option of selecting by September 30, 2025, through the Protean CRA website, and the decision is not reversible.
Limited OPS Eligibility
In March 2023, a one-time OPS option was offered to employees that were hired after a vacancy after December 22, 2003, but appointed after 2004. This window was closed and no additional extensions are intended.
State-Level OPS Revival
There are other states such as Rajasthan, Chhattisgarh and Himachal Pradesh, which have reintroduced OPS, contributing 1,000 crores a year to their budgets. These states will not have NPS corpus returned to them by the Centre, however.
Pension Comparison Table
| Scheme | Pension Amount | Contribution | Eligibility |
|---|---|---|---|
| OPS | 50% of last salary | None by employee | Pre-2004 hires |
| NPS | Market-linked | 10% employee, 14% govt | Post-2004 hires |
| UPS | 50% of last salary | 10% employee, 18.5% govt | Post-2004 hires |
Stay Informed
The OPS is also restricted to those employees hired before 2004, and the future of post 2004 employees is UPS. Keep track of changes at dopt.gov.in and make a prudent decision by September 30, 2025.
Also read: 8th Pay Commission Update: DA Merges into Basic Pay Starting January 2026