OPS vs NPS news: The central government has no proposal under consideration to restore the old pension scheme (OPS) for central employees covered under the National Pension System (NPS).

Finance Minister Nirmala Sitharaman said in the Lok Sabha that the old pension scheme was becoming a burden on the government treasury, so NPS was implemented, which is for central employees (except armed forces) who started their job on or after January 1, 2004.

A committee was formed to reform the NPS, based on whose suggestions the Unified Pension Scheme (UPS) was started. This is an alternative to NPS, which aims to provide a fixed pension to employees after retirement and keep the scheme financially sustainable. The definition of family in UPS has been designed in such a way that employees get a guaranteed pension, and the stability of the fund is also maintained.

Employees who opt for UPS can avail benefits under the CCS (Pension) Rules, 2021, or CCS (Extraordinary Pension) Rules, 2023, if they die during the job or have to leave the job due to disability. The government introduced UPS as an option under NPS by issuing a notification on January 24, 2025.

Under UPS, if the employee has worked for at least 25 years, then on retirement, he will get 50% of the average basic salary of the last 12 months as pension. If the job time is less than 25 years, then the pension will be reduced in the same proportion.

Major improvement in the financial condition of households

In response to another question, Sitharaman said that from March 2020 to March 2024, household financial liabilities (loans) have increased by about 5.5%, while household financial assets (savings and investments) have increased by 20.7%. This means that the net financial position (assets minus liabilities) of households has improved by 2023-24.

According to Reserve Bank of India (RBI) data, banks' retail loans (share of total loans and advances) have increased from 30.94% in March 2024 to 31.48% in March 2025. However, the year-on-year growth rate of retail loans has declined from 17.61% in March 2024 to 14.05% in March 2025.

Household financial savings cross Rs 15.5 lakh crore.

The asset quality of retail loans is stable, with the ratio of gross non-performing assets (NPS) at 1.18% as of March 2025. The share of unsecured loans (without guarantee) in retail loans is low, accounting for 25% of retail loans and 8.3% of total advances.

According to the latest data from the National Statistics Office (NSO), household financial savings are set to increase from Rs 13.3 lakh crore in 2022-23 to Rs 15.5 lakh crore in 2023-24. Therefore, there are no major concerns about the asset quality of banks.

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