After the implementation of old pension scheme by the Rajasthan government, Chhattisgarh has also announced to bring the old pension scheme of government employees. Chief Minister Bhupesh Baghel announced this in the Chhattisgarh Legislative Assembly on Wednesday.
The CM’s announcement regarding the implementation of old pension in Chhattisgarh will benefit more than 3 lakh government employees appointed after January 1, 2004.
It must be noted that during Atal Bihari Vajpayee’s government, it was announced to implement the new pension scheme in place of the old pension scheme from April 1, 2004. Those who joined various government departments after April 1 were made mandatory to contribute to the New Pension Scheme. The central government implemented the new pension scheme but did not make it mandatory for the states. Most of the states adopted it, but after a short time the employees' unions of the state started opposing the new pension scheme and there was a demand to bring back the old pension scheme.
3 lakh government employees will get the benefit
With the implementation of old pension scheme, there will be no financial burden on the government for the coming decade. On the contrary, there will be saving of Rs 1680 crore annually. This is the amount, which the state government contributes in New Pension Scheme. The new pension scheme has been implemented since 2004 and after that around three lakhs government employees were recruited.
Difference between OPS (Old Pension Scheme) and NPS (New Pension Scheme)
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 New Pension Scheme.
The old pension scheme has the facility of General Provident Fund (GPF), while the has not been added to the new pension scheme.
Old Pension Scheme is a secured pension scheme. It is paid through the government's treasury, while the new pension scheme is stock market-based. Payment is made on the basis of market movement.
In the old pension scheme, at the time of retirement, fixed pension is available up to 50 percent of the last basic salary. There is no guarantee of fixed pension at the time of retirement in the New Pension Scheme.
In the old pension scheme, after retirement, gratuity is available up to Rs 20 lakh. There is a temporary provision of gratuity at the time of retirement in the New Pension Scheme.
Dearness Allowance (DA) is applicable after 6 months in the old pension scheme. The dearness allowance received after 6 months in the New Pension Scheme is not applicable.
There is no income tax on GPF interest on retirement in the old pension scheme. On retirement in the New Pension Scheme, the money received on the basis of the stock market will have to be taxed.
In the old pension scheme, there is a provision of family pension in case of death while in service. In the New Pension Scheme, family pension is available on death during service, but the money deposited in the scheme goes to the government.
Also, in old pension scheme, at the time of retirement, no investment has to be made from GPF to get pension. In New Pension Scheme, 40 percent amount has to be invested from New Pension Scheme Fund to get pension.
