The new pension scheme has been named ‘Unified Pension Scheme’ (UPS). For so long, ‘National Pension Scheme’ (NPS) was running for central government employees across the country. Before that there was ‘Old Pension Scheme (OPS)’.
The Center has announced the launch of a new scheme for those doing government jobs. The new pension scheme has been approved in the cabinet meeting held under the leadership of Shri Narendra Modi on Saturday. Ashwini Vaishnaw (Minister of Information and Broadcasting of India) said, if this new scheme is started, it will benefit 23 lakh central government employees.
The new pension scheme has been named “Unified Pension Scheme” (UPS). For so many days, the National Pension Scheme (NPS) was operational for government employees across the country.
Even before this there was “Old Pension Scheme” (OPS).
There was an argument regarding the pension scheme for a long time. In the year 2004, during the government of Shri Atal Bihari Vajpayee, the old pension scheme was replaced by a New Pension Scheme or NPS. Many people had raised objections regarding this scheme.
There will be no guarantee of pension of government employees in this scheme, that is why many labor organizations had raised their voice against this scheme. Financial security of government employees is uncertain after taking retirement under NPS scheme, demanded to bring a new pension scheme.
After that 20 years passed. This time, on the demand of pensioners, the Central Government again announced the launch of a new pension scheme. UPS will be launched from April 1 next year. By the way government employees can opt for any scheme in NPS or UPS.
Many Labor Unions welcomed the launch of UPS (Unified Pension Scheme) by Central Government on Saturday, 24 August. But many people demanded to remove UPS and bring back old scheme.
In this situation, people do not want to try to understand what is the difference between UPS, NPS and OPS?
Actually, emphasis has been given on three subjects in UPS scheme. They are— Assured Pension, Assured Family Pension and Assured Minimum Pension.
In case of assured pension, Central Government employees will get 50 per cent of their average monthly pay (basic) for the last one year of their service as pension. However, to avail this facility, an employee will have to work for 25 years. Only then will be able to avail the benefits of this scheme.
Families of government workers can avail benefits under Assured Family Pension. If a pensioner dies then at the time of his death the amount of pension he will receive is 60 Percent. Pension will be given to his family members.
Along with this, there is also discussion of another benefit under this scheme. That is – Assured minimum pension. If someone works under this scheme for 10 years and then quit that job then he will get 10 thousand rupees every month.
Guaranteed Pension, Guaranteed Family Pension and Guaranteed Minimum Pension in UPS are subject to inflation indexation.
By fixing (inflation indexation) which changes the cost of living with inflation and time, then the pension will also be changed.
However, the Central Government has confirmed that the government employees will get the same gratuity as they used to get. Any influence of UPS will not affect it.
On the other hand, NPS is an optional savings scheme. There is no guarantee of pension amount in this scheme.
A part of the employees’ salary is deposited in the NPS fund every month. The employer also deposits the money. Employees can withdraw 60% of the NPS fund after attaining the age of 60 years.
The remaining 40 percent money can be invested in such a way that he continues to get pension every month. This is about 35 percent of the last salary. That is, after retirement, the employee
has to purchase an annuity from a portion of his pension fund to provide pension throughout his life. Due to which they get regular pension.
In this, the employee contributes 10% of his salary to the pension scheme fund. The government gives 14%.
Under NPS, employees can continue their account even after changing jobs. NPS is regulated by the Pension Fund Regulator (PFRDA).
Under Section 80 CCD of the Income Tax Act, employees can also avail tax benefits by investing up to Rs 1.5 lakh in NPS.
OPS was operational till 2004. The scheme provides 50 per cent assured pension based on last earned salary and total years of service. It is noteworthy that in the old pension scheme, the entire
pension was given by the government. Employees did not have to deposit money.
It was closed in 2003 during the NDA government. NPS was started on 1 April 2004. In the new system introduced from 2004, the state government pays a share, but the employee has to pay the pension himself.
That NPS is also changing this time. UPS is coming. The Narendra Modi government at the Center has said that despite the introduction of UPS, the government has not completely deviated from the path of financial reforms.
