UPS vs NPS vs OPS: For a very long time, authorities workers have been demanding both modification to the New Pension Scheme (NPS) or the reinstatement of the Previous Pension Scheme (OPS). The opposition was additionally utilizing this subject to garner help. In response, the Modi authorities has now taken decisive motion. On Saturday, the Union Cupboard, led by Prime Minister Modi, accredited a brand new pension scheme known as the Unified Pension Scheme (UPS). Beneath this scheme, 50 per cent of the common fundamental pay is drawn during the last 12 months previous to superannuation for a minimal qualifying service of 25 years. Moreover, the scheme provides varied different advantages, equivalent to assured pension, assured household pension, assured minimal pension, inflation-linked indexation, and additional cost along with gratuity. Let’s discover the variations between the Unified Pension Scheme (UPS), the New Pension Scheme (NPS), and the Previous Pension Scheme (OPS).
Previous Pension Scheme (OPS)
- Beneath OPS, 50 per cent of the worker’s wage on the time of retirement is supplied as a pension.
- OPS features a provision for the Basic Provident Fund (GPF), the place workers can contribute a portion of their wage, which is then returned with curiosity on the time of retirement.
- In OPS, workers are eligible to obtain a gratuity quantity of as much as Rs 20 lakh.
- Funds below OPS are made via the federal government treasury, guaranteeing that pensions are funded straight by the federal government.
- Within the occasion of the dying of a retired worker, their household continues to obtain the pension quantity.
- There isn’t a deduction from the worker’s wage for the pension below OPS.
- OPS features a provision for receiving Dearness Allowance (DA) each six months, which helps modify the pension in response to inflation.
New Pension Scheme (NPS)
- Beneath NPS, 10 per cent of the worker’s fundamental wage plus Dearness Allowance (DA) is deducted for the pension fund.
- NPS is linked to the inventory market, which implies the returns are topic to market fluctuations and it’s not fully risk-free. It additionally consists of tax provisions.
- To obtain a pension upon retirement, 40 per cent of the NPS fund should be invested in annuities.
- NPS doesn’t provide a assured fastened pension quantity after retirement; the pension is dependent upon the fund’s efficiency.
- Not like OPS, NPS doesn’t present Dearness Allowance (DA) changes after retirement.
Unified Pension Scheme (UPS)
- In UPS, the duty for funding the pension doesn’t fall on the worker, and there’s a provision for an assured pension.
- Staff will obtain 50 per cent of their common fundamental pay from the 12 months earlier than retirement as their pension.
- If an worker dies earlier than retirement, 60 pe rcent of the pension due will likely be supplied to the partner.
- For these with a shorter service interval, UPS ensures a minimal pension of Rs 10,000 monthly.
- UPS consists of inflation indexation, much like dearness allowance, to regulate assured pension, household pension, and minimal pension in response to inflation charges.
- Along with gratuity, UPS gives a lump sum cost at retirement. For each six months of service, workers obtain 1/tenth of their month-to-month wage (pay + DA) as a one-time cost.
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 which provides for Assured Pension and Assured Family Pension. As per the govt, about 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS).){kind=link}