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What Is the Full Form Of OPS?

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The full form of OPS is the Old Pension Scheme, which is considered a retirement scheme approved by the government. At the end of every month, government employees receive a pension amount under this scheme.  

Government employees who have completed at least years of service based on their last drawn basic salary and the years of service are considered to get a guaranteed pension under this scheme. After retirement, the government pays the entire pension amount to their government employees; however, this also means that no amount is deducted from the employee’s salary when they are in service.

Government workers get their pension after retirement as well as the advantage of a twice-yearly Dearness Allowance (DA).  Their pensions grow when the DA increases twice a year since their benefits are calculated on their latest drawn pay plus DA.

Moreover, this scheme only applies to government employees.

Advantages and Disadvantages of OPS

Advantages:

  • It is considered a life-long income post retirement.
  • With a revision of DA twice a year, the employee’s pension also increases twice a year.
  • Pension payments were not deducted from employees’ salaries.
  • 50% of the last drawn basic salary plus DA, or the average earnings in the last ten months of service, is the predetermined formula for employees to get a pension.
  • The government bears the cost of pension-related expenses.

Disadvantages:

  • Considered a burden on the state and national governments.
  • It is unsustainable since the pension liabilities would continue to increase every year.
  • A pension fund that could steadily increase and lessen the government’s obligation to pay pensions has not been established.

Employees Who Can Apply For The Old Pension Scheme

The Government of NDA introduced the New Pension Scheme as an alternative to the Old Pension Scheme, and all the employees who had joined the service after 2014 were covered under the new scheme and were not considered eligible to get a pension under the OPS scheme after their retirement.

However, Central Government workers were given a one-time opportunity to choose to receive a pension under the OPS in February 2023 by the Department of Pension and Pensioner’s Welfare (DoPPW).

There were a number of criteria that the Central Government employees had to fulfill in order to opt for the OPS; these were as follows.

  • Appointed for a vacant post advertised or notified before the NPS notification date, which is December 22, 2003.
  • Joined service on or after January 1, 2004.
  • Covered under the NPS.

However, the New Pension Plan will continue to cover employees who did not select the one-time option by August 31, 2023.

Did you like reading about the full form of OPS? If yes, you can read more similar blogs from our A-Z list of full forms!

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