Deferred Wages, Not Charity – The Truth About the Old Pension Scheme 1

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Deferred Wages, Not Charity – The Truth About the Old Pension Scheme

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In today’s public discourse, the Old Pension Scheme is often painted as a burden on the nation.
But this claim overlooks a fundamental truth:
Pension is not a handout.
It is a deferred wage — part of a government servant’s rightful earnings, promised for a lifetime of service.

India’s pension system began in colonial times, when the British introduced it to ensure loyalty and stability.
It was formalized in 1871 through the Indian Pensions Act — but even then, pension was seen as a favor, not a right.

After independence, things changed.

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The Government introduced the Liberalised Pension Rules in 1950.
Family pensions came in 1964.
By 1972, the rules were unified under the Central Civil Services Pension Code.
In 1985, pensioners were included in medical care.
And in 1986, SCOVA was formed — giving pensioners a voice in policymaking.

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But the real turning point came in 1982.
In the landmark Nakara judgment, the Supreme Court declared pension a legal right, not a discretionary grant.
It called pension a deferred wage, and struck down unequal treatment of retirees.
This judgment still forms the backbone of pension justice in India.

Here’s what many forget:
Pre-2004 employees didn’t receive employer contributions to their Provident fund.
Their take-home pay was lower — with the assurance that pension would come later.
That’s not a gift. That’s an obligation.
That’s compensation — just delayed.

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Had the government given matching contribution to their provident fund, the notional corpus would now be worth well over Rupees 25 lakh crore to Rupees 31 lakh crore.
Today’s pension payments are simply a return of that withheld value.

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Every Pay Commission has acknowledged this:
From inflation-linked Dearness Relief to pension parity reforms —
these are not handouts.
They’re corrections.
They’re interest on delayed earnings.

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When the National Pension System began in 2004, it shifted the risk to employees.
NPS may be fiscally prudent — but it’s no substitute for the guaranteed safety of OPS.
OPS is not just a scheme — it’s social justice in action.

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To call the Old Pension Scheme a drain is to forget its history.
It’s the product of legal evolution, administrative reform, and judicial affirmation.
It is earned. It is promised. It is owed.

Bharat Pensioners Samaj urges every policymaker, journalist, and citizen:
Recognize OPS for what it truly is —
A contractual obligation, a judicially upheld right,
and a pillar of post-retirement dignity.

Because in a just democracy,
wages deferred… must never be denied