India’s Unified Pension Scheme is all set to bring drastic changes in Retirement Benefits as compared to the previous Old Pension Scheme (OPS) and National Pension System ( NPS). As India moves forward towards a more inclusive and robust retirement framework, the introduction of the Unified Pension Scheme (UPS), scheduled to commence on 1st April 2025, stands as a crucial development in the nation’s social security landscape. This new scheme contains key elements from both the Old Pension Scheme (OPS) and the National Pension System (NPS), aiming to furnish central government employees with a more assured and predictable retirement. Talking to True To Life News, CA Rahul Kumar mentions, “Govt. employee were really worried about their life after retirement because of lack of guarantee in the NPS and hence few people even started switching to pvt for better growth and saving. However, with the coming of UPS (Unified Pension Scheme), the trust has been rebuilt and people feel they have safe and secure future.What is Unified Pension Scheme (UPS)The UPS has been designed to address the growing concerns of government employees regarding the reliability and sufficiency of their post-retirement income. UPS presents a guaranteed pension, one of its most significant features, which was also covered in the Old Pension Scheme (OPS). Hence, under UPS, Government employee who have been serving for last 25 years, gets atleast 50 percent of their basic salary after retirement.Employees who have completed at least 25 years of service are entitled to a pension equivalent to 50% of their average basic salary. This pension is proportionately adjusted for those with less than 25 years but more than 10 years of service, ensuring inclusivity across the board.Additionally, the UPS offers a minimum guaranteed pension of ₹10,000 per month, providing a safety net for all eligible employees, regardless of their final salary. The scheme extends its protection to the families of pensioners through a family pension, entitling surviving family members to 60% of the pension the pensioner received.The National Pension System came into force in 2004 after the Old Pension Scheme was terminated. It was also referred to as New Pension Scheme but it lacked any guarantee to provide pension. However in 2009, the government extended the scope of NPS and it started covering all individuals, NRIs, unrecognised along with self employed workers. NPS offered various marked linked schemes, where employee or individuals would invest and receive profit after retirement. According to the National Pension Scheme, the employee pension would depends on the market performance and various schemes linked under NPS.Before 2004, there was scheme called OPS which is Old Pension Scheme and under this the government employees used to receive a pension amount after retirement along with the benefit of Dearness Allowance (DA) revision twice a year. However, in case of the pensioner’s death, his/her family will receive pension benefits. In OPS there was huge burden on government, however it had the feature of guaranteed pensions.
by Aparna Jha
Reporting for
TRUE TO LIFE News Media Pvt Ltd