The Old Pension Scheme (OPS), which is sure again to become heated for government employees entering 2026, is still a conundrum. Recently released words in the Parliament do not specifically state that the government will go on to reinstate OPS; rather that NDA’s National Pension System (NPS) and the United Pension System (UPS) shall be instantiated for the fiscal sustainability.
What is the Old Pension Scheme?
OPS, known as a Defined Benefit pension scheme, guarantees upon retirement approximately 50% of the last salary, excluding dearness allowance, which was fully funded by the government. For central government services the OPS became effective for employees serving in the government before 01-01-2004.
Current Status in Late 2025
As we traverse December 2025, the Ministry of Finance has formally stated in Parliament that there is no plethoric discussion pending to reinstate the government, neither for employees with the NPS nor that for ones bearing the UPS; in reality, it sounds like an announcement of the final action. Additionally, there have been 1.22 lakh employees of the 23 lakh eligible employees who chose not to opt into OPS in follow-up action, despite its availability and the auspice liberalization.
Demands and State-Level Changes
Regarding the requirement, labor unions are persisting to have OPS restored vehemently, using the strategies and risks of market-based contributions in NPS. A few states-be that Pradesh, Chhattisgarh, Punjab, Rajasthan-are duly paying to their existing employees. Consequently, many more are bought or funded at reduced rates in lieu of the central government, which currently cannot access any fund.
Comparison with NPS and UPS
For an NPS kind of scheme, being on the oddest spectrum, the NPS is a market-aligned stakeholder with the NPS. JPS specifies secure albeit to the extent of drawing a minimum payout by the state. It is seen that everything people love the guarantee of OPS.
| Aspect | OPS | NPS | UPS |
|---|---|---|---|
| Type | Defined benefit (guaranteed) | Defined contribution (market-linked) | Assured with contributions |
| Employee Contribution | None | 10% of basic + DA | 10% of basic + DA |
| Government Contribution | Full funding | 14% of basic + DA | 18.5% (including inflation index) |
| Pension Amount | 50% of last pay + DR | Depends on corpus | Minimum 50% of average pay (10+ years service) |
| Risk | None (government bears) | Market risk | Low (assured minimum) |
| Applicability (Central) | Pre-2004 joiners | Post-2004 joiners | Optional from 2025 |
Outlook for 2026
Inasmuch as the sustainability of the scheme is up for the question, there is no central move to revive OPS under the OPS Update 2026. Presently, persons in NPS/UPSwill have one of two options to think of since OPS already does acquaintance; a top-up plan or an additional investment for higher returns may suit them quite well. Many state governments have the capability to restart OPS.
Also read: Bank of Baroda Senior Citizen FD 2025: Super Seniors Earn Up to 7.20% Returns