Karnataka govt to implement Old Pension Scheme

The Karnataka government has announced the reinstatement of the Old Pension Scheme (OPS) for approximately 13,000 state government employees who were recruited after 2006.This decision comes as a fulfilment of Chief Minister Siddaramaiah's promise to the government employees who had been on strike against the New Pension Scheme (NPS).The Old Pension Scheme is a defined benefit pension plan, which guarantees a specific retirement benefit amount for employees, unlike the NPS which is a defined contribution plan where the retirement benefit depends on the investment performance. The reinstatement of OPS was a longstanding demand by the state government employees, and it has been met with a positive response from various quarters. "I hope this decision has given comfort to all the families of 13,000 NPS employees," he added.
Under the new pension scheme, employees contribute a portion of their salaries to the pension fund. Based on that, they are entitled to a one-time lump sum amount on superannuation.The old pension scheme was discontinued in December 2003, and the new pension scheme came into effect on April 1, 2004.The decision to bring back the OPS is expected to have a significant financial impact on the state's exchequer, especially considering the additional burden of the 7th Pay Commission, which is projected to increase annual expenditure substantially for the salaries of the state’s six lakh employees.

(Dr Mysi Patil, State Correspondent)