OPS adoption may benefit current generation at cost of future generations

Pension payments as a percentage of revenue receipts of states increased from 2 per cent in 1980-81 to 11 per cent in 1999-2000

Several states, including Himachal Pradesh, which held elections recently, have announced their decision to bring back the old pension scheme (OPS). 

Pension reforms were implemented about two decades ago to reduce the burden on the finances of central and state governments. By reverting to OPS, states may reduce their pension expenditure in the near term, but will incur higher pension expenditure in the longer run.

In 2000, the Project Old Age Social and Income Security report observed that higher government spending on old age security had often been at the cost of spending on other important public goods.

The Report