Chhattisgarh First State to Restore Old Pension Scheme

Chhattisgarh has become the first state in the country to restore the old pension scheme in order to provide assured income to retired employees. The state issued Gazette notification to switch back to the Old Pension Scheme (OPS) from National Pension Scheme (NPS) will be effective from April 1, 2022.

• In Feb.2022 Rajasthan had also announced restoration of OPS in its 2022-2023 budget the state has not issued a Gazette notification.

Benefits and Exemption

1. Chhattisgarh Chief Minister Bhupesh Baghel in 2022 -2023 Budget announced the government’s decision to revert to the old pension system (OPS) for State government employees.
2. The move will benefit over three lakh employees who joined service after January 1, 2004.

• However, it will not be applicable to officials of the All India Services like members of the Indian Administrative Service or the Indian Police Service.

Main Difference in the Old and New Pension Scheme

• The main difference between two pension systems is that while an employee has to make a voluntary contribution towards pension by undertaking a 10% deduction from the basic salary and dearness allowance, there is no such deduction under OPS. However, a minimum of 12 per cent of basic salary will be deducted as per the General Provident Fund rule.
• Under the Old Pension Scheme, the government gives 50% of the salary of an employee as pension at the time of retirement.