Millions of employees got silver, the old pension scheme was restored by the Supreme Court, know what is the difference between the new and old pension scheme?
Old vs New Pension Scheme: Recently, the Supreme Court had implemented the old pension scheme. For a long time, the employees were demanding restoration of this pension scheme. Let us tell you, the Supreme Court was hearing this petition filed by the employees, whose decision was given on 4 November. In such a situation, let us know what is the difference between the old and the new pension scheme and why the employees were demanding the old pension scheme?
What did the Supreme Court say in its decision?
In fact, the Supreme Court on Friday upheld the validity of the Employees’ Pension (Amendment) Scheme for the year 2014. However, the court set aside the limit of Rs 15,000 monthly salary for joining the pension fund. The 2014 amendment had fixed the maximum pensionable salary (inclusive of basic pay and dearness allowance) at Rs 15,000 per month. Before the revision, the maximum pensionable salary was Rs 6,500 per month.
The bench set aside the decision of 2014
A bench of Chief Justice UU Lalit, Justice Aniruddha Bose and Justice Sudhanshu Dhulia said that the employees who have not exercised the option of joining the pension scheme, will have to do so within six months. The bench said that the eligible employees who could not join the scheme till the last date should be given an additional chance. Because the decisions passed by the High Courts of Kerala, Rajasthan and Delhi lacked clarity on the issue. The bench struck down the condition in the 2014 plan that employees would have to make an additional contribution of 1.16 per cent on wages above Rs 15,000. However, the court said that this part of the judgment would be kept suspended for six months so that the authorities could collect the funds. The Employees’ Provident Fund Organization and the Center had challenged the decision of the High Courts of Kerala, Rajasthan and Delhi that quashed the 2014 scheme.
What is the specialty of old pension scheme?
- No deduction from salary for pension
- GPF (General Provident Fund) facility
- Secure pension plan. It is paid through the Treasury of the government.
- At the time of retirement in OPS, fixed pension is available up to 50% of the last basic salary.
- Gratuity is available after retirement up to Rs 20 lakh
- There is a provision of family pension in case of death during service.
- No investment is required from GPF to get pension at the time of retirement
These are the benefits of New Pension Scheme
- Deduction of 10% (Basic+DA) from employee’s salary
- General Provident Fund (GPF) facility not added
- NPS is stock market based, payment is made on the basis of market movement
- There is no guarantee of fixed pension at the time of retirement
- There is a temporary provision of gratuity at the time of retirement
- Family pension is available on death during service, but the money deposited in the scheme is forfeited by the government.
- For getting pension, 40 percent money has to be invested from NPS fund.
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