UPS vs OPS vs NPS: The Modi authorities has launched a brand new pension scheme referred to as the Unified Pension Scheme (UPS) for central authorities workers who joined the service after January 1, 2004. This scheme, which will probably be applied from April 1, 2025, ensures a pension equal to 50% of the essential wage. The choice to introduce UPS is available in response to a number of non-BJP states reverting to the DA-linked Previous Pension Scheme (OPS) and worker organizations in different states demanding the identical.
Staff have the choice to decide on between UPS and NPS.So how does UPS examine to NPS? And the way does it examine to the OPS? We have a look:
Staff have the choice to decide on between UPS and NPS.So how does UPS examine to NPS? And the way does it examine to the OPS? We have a look:
Unified Pension Scheme (UPS): Prime Options
- Beneath the UPS, workers with a minimal qualifying service of 25 years will obtain an assured pension of fifty% of the typical primary pay drawn over the past 12 months previous to superannuation.
- For service durations between 10 and 25 years, the pension will probably be proportional.
- Within the occasion of an worker’s demise, their household will obtain an assured pension of 60% of the worker’s pension instantly earlier than their demise.
- The scheme additionally contains an assured minimal pension of Rs 10,000 monthly upon superannuation after a minimal of 10 years of service.
- The UPS will apply inflation indexation to the assured pension, assured household pension, and warranted minimal pension.
- Dearness Reduction will probably be primarily based on the All India Shopper Worth Index for Industrial Employees (AICPI-IW), just like service workers.
- Moreover, workers will obtain a lump sum cost at superannuation, calculated as 1/tenth of month-to-month emoluments (pay + DA) for each accomplished six months of service. This lump sum cost is separate from gratuity and doesn’t impression the assured pension quantity.
- Staff selecting the UPS is not going to incur any further monetary burden. Their contribution will keep at 10 p.c, whereas the federal government’s contribution will rise from 14 p.c to 18.5 p.c.
Nationwide Pension Scheme (NPS): Prime Options
NPS and the newly proposed UPS differ when it comes to authorities contributions, pension quantities, and household pension provisions.
- Beneath NPS, central authorities workers contribute 10% of their primary wage, whereas the federal government contributes 14%, based on an ET report.
- The pension quantity in NPS will not be fastened as it’s linked to market actions, whereas UPS offers an assured pension of fifty% of the wage for individuals who joined the service after January 1, 2004.
- Household pension beneath NPS depends upon the accrued corpus within the pension fund and the chosen annuity plan at retirement.
- NPS has been applied for all authorities workers, besides these within the armed forces, who joined the central authorities on or after January 1, 2004. It’s also accessible for private-sector workers. Most state/Union Territory governments have additionally notified NPS for his or her new workers.
Previous Pension Scheme (OPS): Prime Options
- The Previous Pension Scheme (OPS) supplied retired authorities workers with a month-to-month pension equal to 50 p.c of their final drawn wage. This quantity was topic to extend in step with the hike within the Dearness Allowance (DA) charges. Upon retirement, workers have been additionally entitled to obtain a gratuity cost, with a most restrict of Rs 20 lakh.
- Beneath the OPS, if a retired worker handed away, their household would proceed to obtain pension advantages. One other notable facet of the
OPS was that no deductions have been constituted of an worker’s wage in the direction of pension contributions, which is in distinction to the NPS.
Lately, a number of states in India, together with Himachal Pradesh, Rajasthan, Chhattisgarh, and Punjab, have made the choice to revert to the Previous Pension Scheme, transferring away from the NPS.
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