Government employee unions have demanded that the Old Pension Scheme (OPS) should replace the National Pension System (NPS), for years.
But as the debate gains momentum again , even employee representatives now admit that fully scrapping NPS may no longer be simple. Why?
Because after nearly two decades of NPS implementation, more than Rs 16.5 lakh crore has already entered the system through employee and government contributions, creating major financial, market and administrative challenges around any complete rollback.
That is why many employee bodies are now increasingly talking not just about restoring OPS, but about creating “OPS-like guarantees” inside the
The timing of this debate is important because the work of the is now slowly entering a more active phase.
After beginning with initial planning and consultations, the Commission has from stakeholders across different regions of the country.
Speaking exclusively with IndiaToday.in, Dr Manjeet Singh Patel, National President of the All India NPS Employees Federation and National Mission for Old Pension Scheme Bharat, explained why bringing back OPS has become far more complicated today than it was a few years ago.
The Old Pension Scheme remains one of the biggest demands raised by employee unions before the 8th Pay Commission.
Under OPS, retired employees receive a guaranteed pension linked to their last drawn salary along with
The AINPSEF memorandum submitted to the 8th Pay Commission says OPS provides “social security” and financial stability after retirement.
The memorandum states that under OPS, employees receive “50% of last basic salary plus DA as pension after superannuation”.
Employee unions argue that this guaranteed pension model gives retirees predictable post-retirement income and protection against inflation.
In contrast, they say NPS is market-linked and does not guarantee a fixed pension amount.
The AINPSEF memorandum argues that under NPS, pension depends on accumulated corpus and market returns, creating uncertainty for employees after retirement.
The federation also highlighted cases where some employees retiring under NPS receive extremely low pension payouts because they entered regular service late and could not build enough corpus.
The memorandum claimed that in certain cases, pensions under NPS have ranged between “Rs 200 to Rs 2,000 per month”.
Despite the growing demand for OPS, Patel said completely dismantling NPS today would be extremely difficult because the system is now deeply integrated into the financial structure.
“There are two ways. One is to scrap NPS completely and restore OPS. But today the biggest challenge is that the money of employees across the country is already invested through NPS,” Patel told IndiaToday.in.
According to him, the total NPS corpus has now crossed around Rs 16.5 lakh crore.
Patel explained that this money is invested through institutions such as LIC, SBI, UTI and other government-linked financial entities.
He said suddenly withdrawing such a massive corpus from the system would not be easy because the money is already invested across different financial instruments and markets.
“If this money is withdrawn suddenly, then first of all it becomes difficult because it is invested in different places. Secondly, the value of the money can also get affected,” he said.
Patel also argued that NPS has now become an important source of market liquidity.
Under the current structure, employees contribute 10% of their salary towards NPS, while the government contributes 14%. Under the Unified Pension Scheme (UPS), the government contribution has been increased to 18.5%.
According to Patel, this results in investments of over Rs 12,000 crore entering the market every month through NPS-linked contributions.
“If NPS is scrapped completely, then this investment flow will stop. It can negatively affect liquidity in the market and financial institutions,” he said.
Patel also warned that a sudden rollback could affect asset values and create wider financial stress because pension money is now closely linked with market investments.
Instead of fully dismantling NPS, Patel believes modifying the existing system to provide guaranteed pension security may now be a more practical solution.
“Making changes in NPS or UPS to make it similar to the Old Pension Scheme is easier,” he said.
This idea is also reflected in the AINPSEF memorandum submitted before the 8th Pay Commission.
The federation has demanded:
The memorandum states that “a minimum guaranteed pension framework be established, ensuring that pension is linked to the pay level rather than solely to corpus accumulation”.
Patel argued that because the government is already contributing 18.5% under UPS, a guaranteed pension structure can still be created without dismantling the broader NPS system.
He explained that after 25 to 30 years of service, many employees would have built a large retirement corpus running into crores.
According to him, the government could use its own contribution component to provide guaranteed pension benefits similar to OPS while retaining the larger NPS framework.
“Employees can get guaranteed pension benefits and the government will also not need to completely scrap the existing system,” Patel said.
Patel also argued that pension burden naturally reduces over time because after a pensioner’s death, family pension typically reduces to 60% of the original pension amount.
“So gradually the pension burden also reduces,” he explained.
As consultations under the 8th Pay Commission expand, the on June 22 and 23, 2026.
According to an official notice, the Commission will hold discussions with government organisations, institutions, unions and employee associations in Uttar Pradesh during the visit.
Central government organisations, institutions, unions and associations interested in meeting the Commission have been asked to submit appointment requests by June 10, 2026. Stakeholders will also need to provide a unique memo ID generated after submitting their memorandum on the official 8CPC website.
The Commission said venue details and meeting timings will be communicated later to selected participants.
However, stakeholders from states and Union Territories other than Uttar Pradesh have been requested not to seek appointments for the Lucknow visit, as separate consultations will be organised in their respective regions later.
The OPS versus NPS debate has once again gained momentum because the 8th Pay Commission has already started consultations with employee unions and staff representatives across the country.
During the , employee bodies raised issues related to pensions, fitment factor, DA merger, family-unit formula and retirement benefits.
For lakhs of government employees, the pension debate is no longer just about choosing between OPS and NPS.
It is increasingly becoming a larger discussion around guaranteed pension security, inflation protection and whether India can create a hybrid pension model that balances employee welfare with fiscal and market realities.
And as the 8th Pay Commission consultations move from one state to another, that debate is likely to become even sharper.