Raghuram Rajan is currently associated with the University of Chicago. He said that as far as he understood, going back to the old pension scheme would not be practical both technically and legally.
Old pension scheme by some states (Old Pension System) Expressing concern over the decision to restart the Reserve Bank of India (RBI) Statements have started pouring in from the former governors. First Subbarao, now Raghuram Rajan. Rajan has given his opinion on OPS earlier also and has called it wrong. This time he has said that some less expensive ways should be found to address the concerns of the government pensioners. Rajan said that the old pension scheme involves a large future outlay as the pension is linked to the current salary. He said that it may not happen in the near future but it will be a huge liability in the long term.
it is necessary to find solutions
Rajan is currently associated with the University of Chicago. He said that as far as he understood, going back to the old pension scheme would not be practical both technically and legally. In an email interview to PTI, he said that due to which such steps have to be taken, there can be less expensive ways to address those concerns. In a major move, a one-time option has been given to a select group of central government employees to opt for the old pension scheme.
Difference between OPS and NPS
Under OPS, employees get a fixed pension. An employee is entitled to receive 50 per cent of his last pay drawn as pension. The National Democratic Alliance (NDA) government had decided to close OPS from April 1, 2004. Under the New Pension Scheme (NPS), employees contribute 10 per cent of their basic salary, while the government contributes 14 per cent.
These states started OPS
The governments of Rajasthan, Chhattisgarh and Jharkhand have informed the Pension Fund Regulatory and Development Authority (PFRDA) about their decision to resume OPS for their employees. Punjab has also decided to start OPS again.
Source: www.tv9hindi.com
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