More Stories

Informist, Monday, Aug. 11, 2025

 

NEW DELHI – State government employees of five states may have to let go of pension corpus to the tune of INR 1.31 trillion as those states had switched to the National Pension System from the Old Pension Scheme, and after contributing for a few years, made a jump back to the old pension plan, the finance ministry said Monday. The five states are Rajasthan, Punjab, Chhattisgarh, Jharkhand, and Himachal Pradesh, the ministry said.

 

"There is no provision under the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013, read along with PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015, and other relevant Regulations, vide which the accumulated corpus of the subscribers towards National Pension System can be refunded and deposited back to the state government," Minister of State for Finance Pankaj Chaudhary said in a written response to a question in the Lok Sabha.

 

Rajasthan's contribution stuck under National Pension System is to the tune of INR 508.84 billion, followed by Punjab's INR 319.60 billion, Chhattisgarh's INR 225 billion, Jharkhand's INR 143.69 billion, and Himachal Pradesh's INR 111.12 billion.

 

Chaudhary also said that the central government has no proposal under consideration to restore the Old Pension Scheme. "The government had moved away from OPS (Old Pension Scheme) due to its unsustainable fiscal liability on the government exchequer," he said.

 

At INR 1.31 trillion, the contribution of these five states under the National Pension System is almost 17% of the assets under management of all the state governments, and 8.5% of the total assets under management of the plan.

 

In May 2023, Informist had reported that these five states had issued notifications to pull out of the National Pension System to revert to the Old Pension Scheme but Punjab, Chhattisgarh, and Himachal Pradesh continued to contribute to the scheme irrespective of the on-paper withdrawal. Rajasthan discontinued contribution in mid-2022-23 (Apr-Mar) and Jharkhand stopped paying from Apr. 1, 2023, an official at the Pension Fund Regulatory and Development Authority had said.

 

The government introduced the defined-contribution National Pension System on Jan. 1, 2004, replacing the defined benefit pension scheme. All states, except Tamil Nadu and West Bengal, joined the new plan. Under the Old Pension Scheme, government employees who have completed at least 10 years of service receive a monthly guaranteed pension based on their last drawn basic salary and the years of service. Under this, employees do not need to contribute.

 

A Reserve Bank of India staff paper released in September 2023 estimated that under the Old Pension Scheme, the actual pension burden of states would increase by around 4.5 times of the estimated pension outgo under the National Pension System, with the additional old pension scheme burden rising to 0.9% of GDP by 2060.  End

 

Reported by Priyasmita Dutta

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.