The central government has reiterated its stance against restoring the Old Pension Scheme, citing financial burden, even as five states express intent to revert to the guaranteed pension model, highlighting ongoing pension reform debates across India.
The central government has told Parliament that it is not considering a return to the Old Pension Scheme for employees covered by the National Pension System, a stance that keeps alive one of the most contentious issues in India’s public sector pay debate. The reply, given in the Lok Sabha by Minister of State for Finance Pankaj Chaudhary, said restoring the older, guaranteed pension model would place a heavy and rising burden on the exchequer.
The clarification matters because pressure for a revival of the Old Pension Scheme has persisted across the country, with government employees and unions arguing that the older arrangement offers far greater retirement security than the market-linked NPS. Under the current system, both workers and the government contribute to a retirement corpus, which is then invested and used to provide pension income after retirement.
According to the parliamentary reply, five states , Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh , have informed the Pension Fund Regulatory and Development Authority that they intend to move away from NPS and restore the Old Pension Scheme. The amounts already accumulated in NPS for those states are substantial: Rajasthan has ₹53,403.89 crore, Punjab ₹40,673.08 crore, Chhattisgarh ₹24,030.04 crore, Jharkhand ₹14,420.90 crore and Himachal Pradesh ₹12,525.96 crore as of July 26, 2026.
The government also made clear that there is no legal provision for returning those NPS funds to the states, even if they switch back to the older pension model. That means the contributions already deposited by employees and governments would remain in the system. For now, the message from New Delhi is unambiguous: the National Pension System stays in place, and a nationwide restoration of the Old Pension Scheme is not on the table.
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