- Finance Ministry clears up who can get Old Pension Scheme benefits for central government employees.
- A one-time option is available under OM No. 57/05/2021-P&PW(B) for some employees to choose OPS.
- SBI employees who joined on or after August 1, 2010, are not eligible for OPS according to SBI Pension Fund Regulations.
The Finance Ministry has issued fresh clarifications on the eligibility of central government employees for the Old Pension Scheme (OPS). The OPS, once the primary retirement benefit for government staff, now applies only under specific conditions following the introduction of the National Pension System (NPS) in 2004. The latest update outlines the government’s official stance, details of the one-time option memo, and its implications for employees, including those working with the State Bank of India (SBI).
Who Can Get Old Pension Scheme Benefits?
The Finance Ministry has made it clear that Old Pension Scheme benefits are not available to central government employees appointed against vacancies advertised before the NPS notification dated December 22, 2003, if they were appointed after NPS started. This means only employees appointed before the NPS notification or who meet certain conditions can get OPS benefits.
Government’s Official Position on OPS Extension
In a Lok Sabha session on August 13, 2025, Minister of State for Finance, Pankaj Chaudhary, said there is no plan to extend OPS benefits to employees appointed after NPS started, whether in Public Sector Undertakings (PSUs) or Public Sector Banks. This is based on various court rulings and government instructions.
One-Time Option Under OM No. 57/05/2021-P&PW(B)
The Department of Pension and Pensioners Welfare issued a memo on March 3, 2023, giving a one-time option to certain central government employees. This option lets employees who were declared successful in recruitment results on or before December 31, 2003, for vacancies before January 1, 2004, and who joined service after January 1, 2004, under NPS, choose to be covered under the CCS (Pension) Rules, 1972 (now 2021).
This option was given after talks with various departments and court decisions, with a set deadline to make this choice as per the OM dated February 17, 2020.
Old Pension Scheme and SBI Employees
About SBI employees, the Finance Ministry clarified that according to the State Bank of India Employees’ Pension Fund Regulations, 2014, the Old Pension Scheme does not apply to those who joined SBI on or after August 1, 2010. This was in response to a question about employees whose recruitment was before August 1, 2010, but whose appointment was delayed beyond that date.
What is the Old Pension Scheme (OPS)?
The Old Pension Scheme is a traditional pension system in India that started in the 19th century and changed a lot after independence. It provides a fixed pension amount after retirement, including options like pension commutation and family pension. The retirement age under OPS was raised from 58 to 60 years over time.
Although it stopped for central government employees in January 2004, many Indian states still follow the OPS.
About the National Pension System (NPS)
The National Pension System replaced OPS for central government employees starting January 1, 2004. Unlike OPS, NPS is a defined contribution scheme where your pension depends on market returns. Employees open a Tier I NPS account and at 60 years can withdraw up to 60% of their total savings as a lump sum. The rest must be used to buy an annuity plan, which gives a monthly pension.
Knowing these differences and who qualifies can help you make better choices about your pension benefits. For official details, you can visit the Department of Pension and Pensioners Welfare website at https://doppw.gov.in.