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Pension Schemes: OPS vs NPS



  Sep 09, 2023

Old Pension Scheme vs National Pension System


Aspect National Pension System (NPS) Old Pension Scheme (OPS)
Retirement Savings Managed by PFRDA Traditional pension system
Membership Covers employees who joined after Jan 1, 2004 Employees who opted for OPS
Contributions Both employees and employers contribute Only employees contribute
Investment Invested in various asset classes Not applicable (guaranteed pension)
Accumulated Savings Employees accumulate a corpus over time Not applicable (pension is predetermined)
Retirement Benefit Partial lump sum withdrawal, annuity purchase Guaranteed pension for life
Annuity Options Options for systematic withdrawals and annuities Not applicable (fixed pension amount)
Portability Portable across jobs and locations Not applicable (linked to specific job)
Returns and Risk Exposure to market risks and returns Not applicable (fixed pension regardless)
Government Liability Limited to contributions and returns Full pension liability rests with government
Flexibility More investment options and withdrawal choices Limited flexibility, fixed pension amount
Pension Sustainability Dependent on market performance Independent of market fluctuations


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