The government announced a new pension scheme which is a mix of Old Pension Scheme (OPS)and National Pension Scheme (NPS) called Unified Pension Scheme(UPS) . The UPS seems to be a better deal for employees .
The Union Cabinet chaired by Prime Minister Mr. Narendra Modi launched the Union Pension Scheme .The UPS will provide an assured pension scheme to 23 lakh Central employees .The UPS announced by the government holds significant differences from the Old Pension Scheme .Mr. Modi said that this scheme will ensure the Dignity and financial security of employees and also appreciates employees for their hard work
Unified Pension Scheme – An Overview
The UPS provides Employees a steady Pension based on their length of service and recent basic salary drawn. The UPS was launched due to the employees’ rebound regarding lower returns and lower corpus in the National Pension Scheme and problems in the withdrawal of the Old pension Scheme .
Main Features to be Understood
The employees are given options of UPS and NPS and choose one among them . The existing subscribers of NPS if desired can transfer to UPS . The state government is also working on launching UPS.
According to Times of India report , the Cabinet Secretary TV somanathan said actuarial calculation would be done every three years to ensure the liability doesn’t remain unfunded which served as a drawback In case of OPS.
Ashwini Vaishnaw , Minister of Information and Broadcasting of India said that a minimum Rs 10000 would be offered to employees who work for 10 years , with a pension to spouse fixed 60 % of the deceased employees pension
Upon retirement a lump sum of rupees equalling to 6 months salary including Dearness Allowance will be disbursed to the employees as a one time payment .
Key Points of UPS
- Assured family Pension
60% of pension of the employee to his family immediately at his demise
- Assured minimum Pension
Completion of 10 years of service, Rs.10000 per month as superannuation is provided
- Inflation indexation
Dearness Relief based on All India Consumer Price index for industrial workers in case of service
- Lump Sum payment at retirement
One time payment compounded from 6 months salary including DA of employee is given at time of retirement.
Differences of UPS and OPS
Employees have to contribute 10 % of their basic salary and Dear Allowance and the Government has to contribute 18.5% . Under NPS government currently contributes only 14% .
The employees are provided with Rs.10000 per month after retirement with having completed 10 years of service where the OPS currently provides 9000 per month
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