homepersonal finance NewsPlea filed against Maharashtra employees' strike demanding OPS: A look at what's happening

Plea filed against Maharashtra employees' strike demanding OPS: A look at what's happening

Plea filed against Maharashtra employees' strike demanding OPS: A look at what's happening
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By Anshul  Mar 16, 2023 3:39:44 PM IST (Updated)

Maharashtra government employees resorted to a strike after talks between the unions and the state government failed on Monday. On Tuesday, employees raised slogans like "Only one mission, Restore Old Pension" outside government offices and hospitals.

An application has been filed in the Bombay High Court seeking immediate withdrawal of the ongoing strike of the Maharashtra state government employees, saying it has hit patients and students. The state government employees declared an indefinite strike from March 14, seeking restoration of the Old Pension Scheme (OPS).

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Paramedics working in hospitals run by the state government and civic bodies, sanitation workers, and teachers have also reportedly joined the strike. The application, filed by advocate Gunratan Sadavarte, said the strike has affected health services at government-run hospitals and education in schools and colleges.
Patients in government hospitals are suffering due to the agitation, it said.
It added that while the petitioner was not against the rights of the employees, but going on strikes affects common citizens and students.
The ongoing debate
Employees have made several demands including the cancellation of the New Pension Scheme (NPS) and the implementation of OPS, which was scrapped in 2005. They believe that NPS is not in the interest of the retiring employees.
OPS was based on years of service and pension was based on the last basic salary plus dearness allowance. In this, an employee was guaranteed the right of pension as half of the last basic salary plus dearness allowance at the time of retirement, if the service was not less than 10 years. At the time of retirement and in case of in-service death, an employee or his/her family was given economic support.
The NPS, on the other hand, protestors believe, is based on long-term investment fund ideology and it could be better in the case of more than 30 years’ service. But, in case of fewer years’ of service, due to lower corpus, the pension is not sufficient for the retiree’s survival.
States implementing OPS
The state governments of Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh have informed the central government about their decision to restore OPS for their state government employees.
Basis of DifferenceNPSOPS
ReturnsThe returns are not guaranteed and constant as money is invested in market-linked securities.OPS offers pensions to government employees on the basis of their last drawn salary, which is 50 percent of the last drawn salary. This is fixed.
Tax BenefitsAnnual investments up to Rs 1.5 lakh are tax-deductible under Section 80C of the Income Tax Act, 1961.  Additional annual investments up to Rs 50,000 are tax-deductible under Section 80CCD (1B) of the Income Tax Act, 1961.No tax benefits are applicable.
Tax on pension amountOn retirement, NPS provides a pension fund that is 60 percent tax-free when redeemed. The remainder, which is 40 percent, has to be invested in annuities. This is taxable.Income from OPS does not attract any tax.
EligibilityAll Indian citizens between 18 and 65 years are eligible.Only government employees are eligible.
Which is better, what do experts say?
Experts believe that NPS is suitable for those willing to take certain risks as it is volatile. However, there are several benefits of NPS which must be considered. It allows one to plan the retirement corpus and offers tax benefits. At times, it can offer decent returns.
On the other hand, OPS is best suited for the ones who are risk-averse and want decent funds at retirement.
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