Old pension plans provide a significant financial risk, the RBI cautions States

The Reserve Bank of India warned States against the inevitable return to the previous pension scheme, describing it as a significant financial risk (OPS).

The central bank reversion to OPS by some States poses a significant danger on the “subnational fiscal horizon” and would cause them to accumulate unfunded liabilities in the upcoming years, according to their most recent research, “State Finances: A Study of Budgets of 2022-23.”

Himachal Pradesh, Rajasthan, Chhattisgarh, Jharkhand, and Punjab have so far allowed their employees to use the Dearness Allowance (DA) related OPS.

This news was written by Ms. Pujari Dharani, Research Assistant, All India Legal Forum.

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