8th Pay Commission: Will Central Government Employees Get Old Pension Scheme Instead of NPS?

The debate over pension reforms in India has gained fresh momentum as employee unions renew their demand for the restoration of the Old Pension Scheme (OPS), replacing the National Pension System (NPS). The issue has resurfaced amid discussions linked to the 8th Central Pay Commission, although union leaders acknowledge that a complete return to OPS may be difficult.

What Is the Old Pension Scheme (OPS)?

The Old Pension Scheme is a government-funded retirement system that guarantees a lifelong pension to retired employees. Under OPS, pensioners receive a fixed monthly pension, generally around 50% of their last drawn basic salary, along with Dearness Allowance (DA) revisions to help offset inflation.

Supporters of OPS argue that it offers financial security and predictable post-retirement income, unlike market-linked pension systems where returns can fluctuate. 8th Pay Commission News: What a 2.57 to 3.68 Fitment Factor Means for Level 5 Employees.

Why Employee Unions Want OPS Back

Employee associations, including the All India NPS Employees Federation (AINPSEF), have repeatedly called for the restoration of OPS. They contend that the National Pension System exposes retirees to market risks, making pension benefits uncertain.

Union representatives claim that some retirees under NPS have received monthly pensions ranging from just Rs 200 to Rs 2,000, especially those who entered government service later in their careers. They believe OPS provides a more reliable and socially secure retirement framework. 8th Pay Commission Latest News Today: Deadline for Stakeholders To Submit Suggestions and Demands Extended Till June 15.

Why Replacing NPS Is Challenging

Despite growing support for OPS among employee groups, experts say a complete rollback of NPS is unlikely. Since its introduction, NPS has accumulated more than Rs 16.5 lakh crore in contributions. These funds are invested through institutions such as LIC, SBI, UTI and other financial entities.

A sudden dismantling of NPS could disrupt financial markets, affect liquidity and create significant administrative and economic challenges. Policymakers have also expressed concerns about the fiscal burden of reverting entirely to the Old Pension Scheme.

8th Pay Commission and Pension Reform

The OPS versus NPS debate comes at a crucial time as the 8th Central Pay Commission continues its work. The commission, headed by former Supreme Court judge Ranjana Prakash Desai, was constituted in November 2025 and has been functioning for over six months.

Its recommendations are expected to affect nearly 50 lakh central government employees, including defence personnel, and around 65 lakh pensioners. As a result, pension reforms remain one of the most closely watched issues in the lead-up to the commission's final report.

Will OPS Return?

While employee unions continue to press for the restoration of OPS, experts believe that a complete shift away from NPS remains difficult due to financial and structural constraints. However, the demand for stronger pension security is likely to remain a key issue during the 8th Pay Commission deliberations.

(The above story first appeared on LatestLY on Jun 06, 2026 12:21 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).