Govt: States restoring old pension scheme risk amassing liabilities
New Delhi, February 6
With the Old Pension Scheme (OPS) emerging as a major poll plank for the Opposition with the Congress set to make manifesto announcements in election-bound Karnataka and Madhya Pradesh, the government on Monday said states reverting to the old system of defined pension benefits risked accumulating major liabilities in the future.
Parallel to striking a note of caution for Opposition-ruled Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh that have already announced restoration to OPS, the government is studying the Andhra Pradesh Government model of Guaranteed Pension Scheme which offers defined benefits to government employees in case they commit to a minimum defined contribution.
On OPS, however, the government continues to strike a note of caution. Answering a Lok Sabha question by BJD’s Bhartruhari Mahtab who asked whether the additional financial burden due to OPS was likely to push the state governments into debt, Minister of State for Finance Bhagwat Karad said, “As per Reserve Bank of India’s report titled ‘State Finances: A Study of Budget of 2022-23’, the annual saving in fiscal resources that reversion to the old pension scheme entails is short-lived. By postponing the current expenses to the future, states risk the accumulation of unfunded pension liabilities in the coming years.”
