Unified Pension Scheme: The biggest feature of the Unified Pension Scheme is that it has provision for assured pension which was there in OPS but this facility was not available in NPS.
UPS vs NPS: Central Government Employees will now have the option to remain in the National Pension Scheme (NPS) or adopt the new pension scheme Unified Pension Scheme with guaranteed pension. UPS will benefit 23 lakh central employees as they will get assured pension under this scheme which was not there in NPS. The Unified Pension Scheme will come into effect from April 1, 2025 and the employees who are currently associated with NPS can also switch to UPS if they wish.
In the Unified Pension Scheme, the average of the basic salary + DA of the 12 months before retirement will be given as assured pension. Employees will get it as pension on retirement but the necessary condition for this is that the employee has worked continuously for at least 25 years. In the Unified Pension Scheme, employees will have to give 10 percent of their basic pay and DA in UPS to the pension fund as they have been doing in NPS. However, the government will contribute 18.5% to the pension fund which was 14% in NPS.
UPS or NPS- Which will give more pension?
The government is going to implement UPS from next year. But the question is arising that after adopting any pension scheme in UPS or NPS, will the central employees get more pension after retirement. Suppose if a person started a government job at the age of 25 years and at the time of joining the job his basic salary is Rs 50,000 per month, then after working for 35 years, when he retires, there can be a huge difference in the pension and total retirement benefits received under UPS and NPS. According to an estimate, on retirement under UPS, the employee will have a total pension corpus of Rs 4.26 crore, after which he is expected to get a pension of Rs 2.13 lakh every month. If the employee adopts NPS, he will get Rs 3.59 crore as pension corpus and around Rs 1.79 lakh as pension every month.
Under the Unified Pension Scheme, the government will contribute 18.5% to the employees’ pension fund, which is only 14% in NPS. Due to this, a big difference is seen in the employee’s pension corpus. Regarding whether employees should stick to NPS or opt for the Unified Pension Scheme with guaranteed pension, Value Research CEO Dhirendra Kumar suggested in a Moneycontrol report that central employees should stick to NPS till retirement to get equity market returns.
