After major protests across the board questioning the New Pension Scheme, or NPS, in favour of the previous scheme, or Old Pension Scheme, the government has devised the Unified Pension Scheme (UPS).
UPS To be Implemented In April 2025
This change was brought into being after about 21 years after the Vajpayee era change, which resulted in the birth of the New Pension Scheme.
The draft for the new pension scheme has provided the blueprint to the guise in which the new pension scheme would function and benefit the end pensioner.
The new Unified Pension Scheme assures government employees 50 per cent of their last drawn pay as a lifelong monthly benefit.
The scheme will be brought into force in April 2025. Beneficiaries will have time until March 2025 to choose between the NPS and UPS.
Invest 100 per cent of the Fund
The guidelines for the scheme will be finalised by December 2024. As per the recent draft, pensioners will have the option of investing 100 per cent of the total fund amount accumulated. Previously, the central employees only had the option of investing 50 per cent of the funds, that had been accumulated.
Annuity
In the New Pension Scheme (NPS) annuity is set at 40 per cent, meanwhile, in the UPS, annuity is at 100 per cent.
Corpus Fund
The total corpus in the Unified Pension Scheme would be 28.50 per cent. This would be attained through the contribution of both the central employee and the central government.
The employee would contribute 10 per cent and the government will pitch in 18.50 per cent. Previously, in NPS, the centre had a contribution of 14 per cent.
In the NPS, 60 per cent of this amount was given to the employee at the time of retirement. Their pension was made from the remaining 40 per cent of the total amount.
Central employees in UPS will not get the option of withdrawing a lump sum amount at the time of retirement. 100 per cent of the amount deposited in their fund will be used for pension.
