| Features |
Old Pension Scheme |
New Pension Scheme |
| Introduction |
It was introduced in the 1950s. |
It was introduced in 2004. |
| Eligibility |
Only government employees who have completed at least ten years of service are eligible. |
It was started for government employees, but in 2009, GoI extended the scope to all citizens between 18-60 years (including NRIs). |
| Contributions |
This scheme does not require any employee contributions. |
Employees contribute 10% of their base pay, while their employers can contribute up to 14%. |
| Return |
Government employees are entitled to receive 50% of their last drawn basic salary plus a dearness allowance upon retirement. |
60% lump sum after retirement and 40% invested in annuities. |
| Tax Benefits |
Income is not subject to taxation. |
60% of the corpus on maturity is tax-free, while the remaining 40% is taxable when invested in annuities. |
| Flexibility |
It does not have much flexibility as it provides a fixed monthly income. |
The subscribers can choose their asset allocation, allowing them to generate higher returns and build a larger retirement corpus. |
| Return Certainty |
It provides return certainty, as it is based on the last wage received by the employee. |
It offers market-linked returns. Subscribers can benefit from market-linked returns without any guarantee of returns. |
