New Delhi: The Government of India is not considering restoring the Old Pension Scheme (OPS) for central government employees covered under the National Pension System (NPS), Finance Minister Nirmala Sitharaman informed the Lok Sabha on Monday.
She said OPS was discontinued due to its unsustainable fiscal burden. NPS, a defined contribution scheme, applies to all central government employees (except armed forces) who joined on or after January 1, 2004.
To enhance pension benefits under NPS, a committee headed by the then Finance Secretary was set up to recommend changes. Based on its consultations, the government introduced the Unified Pension Scheme (UPS) on January 24, 2025, as an option within NPS. UPS offers assured post-retirement benefits while ensuring fiscal sustainability.
Under UPS, employees retiring after at least 25 years of service will receive 50% of their last 12 months’ average basic pay as pension. Those with shorter service will get proportionate benefits.
Employees opting for UPS will also be entitled to benefits under the CCS (Pension) Rules, 2021 or CCS (Extraordinary Pension) Rules, 2023 in cases of death, invalidation, or disablement during service.
On household finances, Sitharaman said liabilities rose by 5.5 percentage points between March 2020 and March 2024, while assets grew by 20.7 percentage points in the same period, improving the net financial position of households.
According to RBI data, the share of retail loans in total bank lending rose slightly from 30.94% in March 2024 to 31.48% in March 2025, though annual growth slowed from 17.61% to 14.05% over the same period. Asset quality in this segment remains stable, with gross NPAs at 1.18% as of March 2025. Unsecured retail loans make up 25% of retail lending and 8.3% of total advances.
As per NSO data, net household financial savings increased from ₹13.3 lakh crore in 2022-23 to ₹15.5 lakh crore in 2023-24, indicating no systemic risk to banks’ asset quality.
