Unified pension scheme: The Central Government is going to start Unified Pension Scheme (UPS) from today on 1 April, which is especially beneficial for employees who want a certain income after retirement. On January 24, the Pension Fund Regulatory and Development Authority officially announced the Integrated Pension Scheme (UPS) as an alternative to the National Pension System (NPS). Now this scheme will be implemented from today. UPS will only apply to government employees who are registered under NPS. Government employees will have the option to choose one of NPS or UPS.
This scheme is especially beneficial for employees who want a certain income after retirement. The UPS will be applicable to the central employees who are already enrolled under the NPS. Now they will have the option to choose one of NPS or UPS. So, let’s know how to take advantage of it and which option is better.
UPS features
Under the Unified Pension Scheme, 23 lakh central employees will get the benefit of UPS. In which employees will get 50% of their 12 months average basic salary throughout their life after retirement. To avail this service, the employee will have to serve for at least 25 years. Also, from time to time, the benefit of inflation relief will be added to the pension. In addition, after the death of the employee, a member of his family will get 60% of the employee’s pension. Additionally, the employee who has served for only 10 years or more will be paid a minimum of Rs 25,000. You will get a pension of up to 5 lakh rupees. 10,000.
These employees will get benefit
Notification was issued on January 25, 2025 to cover central employees under NPS. In which all government employees get the opportunity to choose the UPS option under NPS. It was clarified that people choosing UPS would not get the benefit of other policies or financial benefits.
Pension will increase on inflation basis
Listing has also been added under the Integrated Pension Scheme. This means that the pension of retired employees will continue to increase in accordance with inflation. This increase will be added to pension in the form of dearness allowance. It will be calculated on the basis of All India Consumer Price Index (AICPI-W) for industrial workers. A lump sum amount will also be given on retirement.
What is the National Pension Scheme (NPS)?
After closing the Old Pension Scheme (OPS), the government launched the National Pension Scheme (NPS) for all government employees in 2004. The account in NPS is portable, that is, it can be operated from anywhere in the country. The government also opened it to private sector employees in 2009. Now under this scheme, central employees have also been given the facility to switch to UPS.
What is the difference between UPS and NPS?
Under UPS, central employees will get a certain pension, which will be 50% of the average of 12 months before their retirement. While the pension amount in NPS was based on market returns, due to which it used to fluctuate.
– Government employees will have to contribute 10% of their salary to both UPS and NPS. While the government will contribute 14% in NPS and 18.5% in UPS.
– After 25 years of service under UPS, employees will get a certain pension. Pension will also increase according to inflation rate. While NPS has no fixed pension.
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