Central Government Allows Eligible Employees to Switch from NPS to OPS

Picture Source: Internet

The central government recently announced that certain central government employees can switch from the new pension scheme to the old pension scheme in one go.

This applies to employees appointed before the National Pension System (NPS) notification date, December 22, 2003. The deadline to exercise this one-time option is August 31, 2023

The Department of Pension and Pensioners’ Welfare (DoPPW) issued an office memorandum on March 3, 2023, to offer a one-time switch to eligible central employees opting for the Central Civil Services (Pension) Rules, 1972 (now 2021).

DoPPW clarified in its notification that central government civilian employees appointed under positions or vacancies posted before December 22, 2003, NPS notification are eligible to transfer to OPS.

Specific eligibility criteria must be met to take advantage of the option to switch from NPS to an old pension scheme.

First, the employee should be a central government employee, except for the armed forces. In addition, job advertisements or notification of employees to be appointed to vacancies or positions should be made by the NPS notification date, December 22, 2003​​.

Once eligible central government employees have opted for the old pension scheme under the one-off option before August 31 2023, they cannot change their decision and elect to re-enrol in the NPS again. Once they switch to OPS, their NPS account will also be closed. An order on the matter will be issued on October 31, 2023.

The move offers some comfort to employees who liked the old pension scheme and thought the NPS couldn’t provide good benefits. The benefit of OPS is that it allows for a lifetime pension after retirement, which is regularly revised. On the other hand, NPS involves investing in funds paid in a lump sum upon maturity.

The Central Government’s decision to allow a one-off switch from the New Pension Scheme (NPS) to the Old Pension Scheme (OPS) has brought much-needed respite to eligible Central Government employees. It provides them with two different pension schemes to choose from according to their convenience.

However, it is essential to note that switching from NPS to OPS is a one-time choice. Those eligible employees who do not exercise this option by August 31, 2023, will continue to be covered by NPS.

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