NPS Calculator

Project your retirement corpus, annuity purchase, and estimated monthly pension from your NPS contributions.

📈 NPS Calculator

NPS requires at least 40% to be used for annuity at 60.
Used to estimate monthly pension (simple yield annual% ÷ 12).
Retirement Corpus

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Monthly Pension (Est.)

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Lump Sum (Tax-free)
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Annuity Purchase
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Note: This is an estimate using monthly compounding for contributions (SIP future value) and a simple yield model for annuity.

Corpus Split at Retirement
Quick Summary
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  • Total amount invested: ₹ 0
  • Estimated wealth gain: ₹ 0

🏛 Old Pension Scheme (OPS) vs New Pension Scheme (NPS) in India

A comprehensive comparison of OPS and NPS – features, benefits, and criticisms.

Pensions play a crucial role in providing financial security to government employees after retirement. In India, the system has undergone major reforms. Until 2004, the Old Pension Scheme (OPS) was applicable, but from 1st January 2004, the New Pension Scheme (NPS) was introduced for new recruits, shifting from a defined benefit model to a defined contribution model.

📌 1. Old Pension Scheme (OPS)

OPS was a Defined Benefit (DB) plan, meaning the pension amount was predetermined and guaranteed by the government.

Key Features
  • Applicable to employees who joined before 31st Dec 2003.
  • Pension = 50% of last drawn basic pay + DA.
  • Guaranteed lifetime pension + family pension after death.
  • No employee contribution required.
  • Dearness Relief (DR) protected against inflation.
  • Other benefits – gratuity, leave encashment, pension commutation.
Advantages
  • Assured and predictable pension.
  • Inflation protection via DR.
  • Family security after pensioner’s death.
Criticisms
  • Heavy burden on government finances.
  • Unsustainable due to rising life expectancy & retirees.

📌 2. New Pension Scheme (NPS)

Introduced in 2004, NPS is a Defined Contribution (DC) plan where both employee and employer contribute to a pension fund. Returns are market-linked.

Key Features
  • Mandatory for central govt. employees joining on/after 01 Jan 2004.
  • Employees contribute 10% of basic pay + DA, govt. contributes 14% (central govt.).
  • Investments in Equity (E), Corporate Bonds (C), Government Securities (G).
  • At retirement: 40% must buy annuity (monthly pension), 60% can be withdrawn tax-free.
  • Portable across jobs and locations.
Advantages
  • Encourages savings with employee + employer contribution.
  • Professional fund management & flexible investment choices.
  • Tax benefits under Section 80CCD(1), 80CCD(1B), 80CCD(2).
Criticisms
  • Pension not guaranteed, depends on market returns.
  • No Dearness Relief like OPS.
  • Pension often inadequate compared to OPS.
  • Complex rules for fund management & withdrawal.

⚖️ 3. Key Differences Between OPS and NPS

Feature OPS NPS
Type Defined Benefit (DB) Defined Contribution (DC)
Applicability Employees who joined before 01.01.2004 Mandatory for employees joining on/after 01.01.2004
Employee Contribution Nil 10% of Basic Pay + DA
Government Contribution Full liability 14% (central govt.)
Pension Amount 50% of last drawn basic pay + DA Based on corpus & market returns
Inflation Protection Yes (Dearness Relief) No direct protection
Family Pension Yes Yes (via annuity options)
Financial Burden High on govt. Shared (employee + govt.)
Tax Benefits Limited Extensive (80CCD)

📰 4. Current Debate: OPS vs NPS

In recent years, states like Rajasthan, Chhattisgarh, Himachal Pradesh, and Punjab have announced a return to OPS citing guaranteed pensions and employee welfare. Employee unions across India are demanding rollback of NPS.

However, financial experts and the central government argue that OPS is fiscally unsustainable in the long run, while NPS promotes a balanced, shared responsibility between the government and employees.