Punjab to roll out ‘guaranteed pension’ scheme, but employees will still contribute 10%

Therefore, unlike the traditional OPS - under which pension is a defined benefit without an employee contribution - Punjab’s proposed model will provide a guaranteed pension payout while still retaining the contributory structure.

3 min readChandigarhUpdated: Sep 15, 2026 11:08 PM IST

The review exercise will also include a study of the central government's Unified Pension Scheme and those run by other state governments. (File photo)

The Punjab government has said it will activate a ‘guaranteed pension’ scheme for its employees – one that resembles but is not the same as the Old Pension Scheme.

In a notification on Sunday the state’s Finance Department referred to an earlier announcement – on November 18, 2022, which made that ‘guaranteed pension’ promise – said it needed four months more to finalise and execute the new scheme.

Crucially, however, the ruling Aam Aadmi Party – which faces an Assembly election that will likely take place in February 2027 – said the nature of the proposed payout will continue to be that of a ‘defined contributory pension scheme’.

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That means the mandatory 10 per cent contribution from employees’ side will continue, while the employer, i.e., the Punjab government, will pay the same.

Therefore, unlike the traditional OPS – under which pension is a defined benefit without an employee contribution – Punjab’s proposed model will provide a guaranteed pension payout while still retaining the contributory structure.

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A senior Finance Department staffer said the government is working out a way to link existing contributions to the proposed ‘guaranteed’ payout. The staffer, who declined to be named, said ‘modalities for employee and state corpus, and payment methodology needs to be worked out.. We don’t yet know how it will be done yet’.

Shyam Lal, an employee leader said, “All these are delaying tactics. Why did they need to study the model now when the elections are around the corner?”

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The review exercise will also include a study of the central government’s Unified Pension Scheme and those run by other state governments. The committee entrusted with the review will then recommend if the proposed ‘modified scheme’ should be implemented or if Punjab should adopt any other pension model.

All of this comes amid government employees protesting for the implementation of the old pension scheme, i.e., the OPS. And the point about the election now roughly six months away is worth revisiting. That is because the Model Code of Conduct comes into force a month before voting and that doesn’t leave the AAP with much time to study the report and make a decision if the committee takes four months.

But the same Finance Department staffer was confident the election schedule would have no bearing on the government’s decision.

Kanchan Vasdev

Kanchan Vasdev is a Senior Assistant Editor in The Indian Express’ Punjab bureau. She is a highly experienced journalist with 22 years of expertise covering high-stakes politics, governance, and social issues in Northern India. Professional Background Role: Primary reporter covering the Punjab Chief Minister’s Office (CMO), government policies, and the Aam Aadmi Party (AAP) leadership in the state. Experience: She previously worked with The Tribune and has played a key role in launching various city editions. Special Projects: Abandoned Brides: Authored a monograph on brides abandoned by NRIs as part of the Prabha Dutt Memorial Fellowship. Environment: Worked as a Centre for Science and Environment (CSE) fellow, focusing on the pollution levels in the Satluj river. Recent Notable Articles (Late 2025) Her recent reporting focuses on the legislative strategies and political maneuvers of the Bhagwant Mann-led Punjab government: 1. Legislative & Governance Standoffs "Punjab govt advances special Assembly session to pass resolution against VB-G RAM G Bill" (Dec 20, 2025): Reporting on the state's move to block the Centre's "Viksit Bharat" mission, which the state claims will undermine MGNREGA. "Punjab govt doubles down on special sessions, sixth in January" (Dec 19, 2025): Detailing the AAP government's use of special sessions as a legislative tool amid tensions with the Governor. "Punjab asks 'VIP teachers' working near Chandigarh to go back to border districts" (Dec 16, 2025): Reporting on CM Mann's move to end the practice of influential teachers avoiding postings in remote areas. 2. Political Analysis & Rural Polls "Punjab rural polls: Why Akalis are likened to dinosaurs in Punjab" (Dec 19, 2025): Analyzing CM Bhagwant Mann's rhetoric against the Shiromani Akali Dal (SAD) following local body elections. "AAP claims win in 78% Punjab zila parishads as counting continues" (Dec 18, 2025): Breaking down the results of the 2025 rural elections. "Rahul Gandhi and Sidhu alike, says Bhagwant Mann" (Dec 13, 2025): Covering the CM's critique of the Congress leadership. 3. Law Enforcement & Bureaucracy "Suspended Punjab IPS officer Ravjot Kaur Grewal awaits reinstatement" (Dec 10, 2025): Investigative reporting on the bureaucratic red tape involving the Election Commission and the state government. "Punjab declines to give parole to Amritpal Singh" (Nov 27, 2025): Detailing the state government's refusal to grant parole to the radical preacher and sitting MP. 4. Welfare & Economy "Punjab government's plan to add more freebies to 'atta-dal' scheme hits funds roadblock" (Dec 4, 2024): An analysis of the fiscal challenges facing the state's flagship food security program. "Mann leads Punjab delegation to Japan and South Korea for investor outreach" (Dec 2, 2025). Signature Beat Kanchan Vasdev is known for her insider access to Punjab's political executive. Her writing provides deep insights into how state policies are formulated and the friction points between the state government and central authorities. Her dual expertise in environment and law allows her to report on complex issues like the "Farmhouse Policy" (Dec 18, 2025) and river pollution with a unique policy-oriented lens. X (Twitter): @kanchan99 ... Read More

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