The Central Government has clarified that it is not currently considering the restoration of the Old Pension Scheme (OPS) for central government employees. The Ministry of Finance confirmed its position in a written reply to Lok Sabha Unstarred Question No. 3637 on August 10, 2026.
The question was raised by Dr. Indra Hang Subba, who sought information about the government’s plans for bringing back OPS, the reasons behind its position, and the status of pension funds accumulated by states that have decided to move away from the National Pension System (NPS).
Why Is the Centre Not Restoring the Old Pension Scheme?
In its reply, the Ministry of Finance stated that restoring OPS is not under consideration because it could place an unsustainable financial burden on the government exchequer.
The clarification is important for central government employees and pensioners who have been seeking the return of the Old Pension Scheme. Under OPS, eligible retired employees receive a defined pension based on their salary and qualifying service, subject to the applicable rules.
The National Pension System, on the other hand, follows a contribution-based model. Contributions made by employees and the government are invested to build a retirement corpus. The final benefits depend on the accumulated funds, investment performance and the applicable withdrawal and annuity rules.
The Centre’s response indicates that there is currently no plan to reverse the existing pension arrangement for central government employees.
Pension Funds of Rajasthan, Chhattisgarh and Other States
The Ministry also addressed questions about pension funds deposited with the Pension Fund Regulatory and Development Authority (PFRDA) under the NPS and the Unified Pension Scheme (UPS). The reply included information provided by state governments about their accumulated pension funds.
The figures cited in the parliamentary response were as follows:
- Rajasthan: ₹53,403.89 crore
- Chhattisgarh: ₹24,030.04 crore
- Jharkhand: ₹14,420.90 crore
- Punjab: ₹40,673.08 crore
- Himachal Pradesh: ₹12,525.96 crore
These amounts represent the pension funds reported for the five states in the Lok Sabha reply, highlighting the substantial sums accumulated under the contributory pension framework.
Can NPS Pension Funds Be Returned to State Governments?
Another key issue raised was whether pension contributions accumulated under the NPS could be returned to states that had decided to leave the scheme.
In response, the Ministry referred to the Pension Fund Regulatory and Development Authority Act, 2013, the National Pension System (Exit and Withdrawals under NPS) Regulations, 2015, and other relevant regulations.
According to the government, the existing legal and regulatory framework does not provide for returning the accumulated pension corpus of subscribers, including the government’s contribution, to a state government.
These funds are intended to provide retirement benefits to subscribers in accordance with the applicable pension rules. Therefore, a state’s decision to move away from the NPS does not automatically entitle it to receive the accumulated pension contributions back. The handling of these funds remains subject to the relevant laws and regulations.
What the Latest OPS Update Means for Government Employees
The latest parliamentary response confirms that the Centre is not considering restoring the Old Pension Scheme for central government employees at present. The government has cited concerns about the potential long-term financial burden on public finances.
However, this clarification does not determine the pension policies of every state. Individual state governments may take separate decisions regarding pension arrangements, implementation and benefits. Employees should check official notifications issued by their respective governments to understand the rules applicable to them.
For now, the Centre’s position remains unchanged: there is no proposal under consideration to restore OPS for central government employees, and accumulated NPS funds cannot simply be returned to state governments outside the existing legal and regulatory framework.
Disclaimer: This article is based on the information provided in the cited parliamentary response and is intended for general informational purposes only. Pension rules, eligibility and implementation may vary by government and applicable regulations. Employees should consult official government notifications and relevant authorities for the latest and most accurate information.