Himachal Pradesh Elections 2022: What is the Old Pension Scheme?

Eyeing to woo government employees in Himachal Pradesh, the main opposition Congress in its manifesto has promised to restore the old pension scheme if the party is voted to power in the upcoming Assembly elections.

The new pension scheme came into effect on April 1, 2004, after the BJP-led NDA government discontinued the old pension scheme in December 2003.

The move has received a lot of backlash from government employees. Several employee organisations have taken to the streets or held protest fasts in the past.

What is the old pension scheme?

- Under the old pension scheme, after retirement, an employee would receive 50 per cent of his/her last drawn basic pay and dearness allowance or their average earnings in the last 10 months of service, whichever is better for the employee.

- To receive the retirement benefit, employees must meet the ten-year service requirements.

- The employees don’t require to contribute towards their pension fund.

The Jai Ram Thakur-led BJP government in Himachal is facing flak over the phasing out of the old pension scheme.

After the new pension scheme came into force, government employees need to contribute 10 per cent of their basic pay and employers contribute up to 14 per cent to their retirement fund.

The backlash over the scheme could prove to be serious trouble for the BJP government in the state. Himachal has approximately 4.5 lakh government employees and a significant number of retired employees.

Taking advantage of the BJP’s weak point, Congress promised to restore the old pension scheme, which will directly benefit nearly 2.5 lakh government employees.