NPS vs UPS vs OPS: How is the Unified Pension Scheme different from the old pension scheme NPS? If it is different, then how different is it? And why should employees adopt this pension scheme? This is the question that almost every employee wants to know at this time.
NPS vs UPS vs OPS: The Narendra Modi government at the Center launched a new pension scheme called Unified Pension Scheme (UPS) last week. This pension scheme is an updated version of the National Pension Scheme (NPS) implemented in 2004. In 2004, the then BJP government of Atal Bihari Vajpayee implemented the National Pension Scheme. After this, all the government and non-government employees of the country started opposing this pension scheme. The main reason for the opposition to NPS was that this scheme was subject to the stock market.
Why did UPS come?
In view of the opposition of employees to the National Pension Scheme, a committee was formed in April this year under the leadership of former Finance Secretary Dr. Somnath to brainstorm on the problems of employees related to NPS. The committee talked with almost all the states and labor organizations. Only after this entire process, the committee recommended the Unified Pension Scheme, which was approved by the government last Saturday.
Why should government employees adopt UPS
How is this pension scheme different from the old pension scheme NPS? If different, then how different? And why should employees adopt this pension scheme? This is the question almost every employee wants to know at this time. On this entire matter, IANS wanted to know from the experts that why should employees leave NPS and adopt UPS?
This is the reason why NPS was opposed
Shiv Gopal Mishra, General Secretary of Eastern Railway Men’s Union (NRMU) in All India Railway Federation (AERF), jokingly says that NPS was a ‘no pension scheme’. NPS was a contributory scheme, in which the money of the employees was invested in the market. No one had much information about it. This scheme depended on the ups and downs of the market. Under this scheme, people get only ₹800, ₹1000, ₹1500 and ₹2000 as pension.
He further says, “Employees did not like the NPS scheme at all, that is why there were so many protests by the employees. NPS was a completely different scheme from UPS. There was no guarantee of a fixed pension to any employee in NPS. Therefore, there is no comparison between UPS and NPS in any way.”
How different is UPS from OPS
On how the Unified Pension Scheme is different from the Old Pension Scheme, Shiv Gopal Mishra says that the Unified Pension Scheme is a contributory scheme, whereas in the Old Pension Scheme there was no contribution from the employees, it was based on their service period.
UPS is better than OPS
Apart from this, in the case of family pension, Shiv Gopal Mishra considers Unified Pension Scheme to be better than Old Pension Scheme. He says, “In the Old Pension Scheme which was in existence till 2004, family pension was payable at 40 percent of the total pension of the person, but in Old Pension Scheme it has been increased to 60 percent. This is a very good step of the government. This will greatly benefit the employee and his family.”
Is this pension scheme so good that employees should remove NPS and update on UPS? On this question, he says that almost all the employees will give preference to this pension scheme over NPS and will shift to it. Employees will suffer a lot from NPS, because with the increase in inflation, there will be no increase in NPS pension, due to which employees will suffer a lot.”
These are the benefits available in UPS
He further says, “Dearness allowance is very important on top of the pension amount. Because if this does not happen then the market price will increase, but the pension will not increase, due to which neutrality will end. After which the employees will be on the verge of starvation. In view of this, this is 100 percent a very good decision. ”
However, will the government be able to calm the issue of restoration of the old pension scheme running in many states of the country by increasing its contribution to UPS to 18.5 percent and talking about all the pension holders? Because many opposition parties promise to restore the old pension scheme in every election. On this question, he says, “After the decision of the central government, the state government will also be bound to implement the Unified Pension Scheme. Even though the state government has talked about implementing the old pension scheme, but no government has implemented it yet. Implementing UPS will be a very good thing, because it is a very good scheme, employees will get a lot of benefit from it.
Finance Minister Nirmala Sitharaman, while answering a question of journalists on Wednesday, made it clear that implementing UPS will not be mandatory for any state.
Karnataka government welcomed UPS
However, on this subject, Shivgopal Mishra says, “On Monday itself, the Congress government of Karnataka has welcomed this pension scheme. And this decision of the central government will largely end or reduce the demand for restoration of the old pension scheme of employees in the states.
23 lakh government employees will benefit
Under the Unified Pension Scheme, about 23 lakh employees of the Central Government will get benefits. Whereas under NPS, employees had two accounts — Tier 1 and Tier 2. Anyone could open it and invest in it, UPS is a fixed pension scheme. Along with this, people will also get the guarantee of family pension and minimum pension, whereas this was not the case in NPS.
What are the benefits of NPS?
After the closure of the Old Pension Scheme, OPS, in NPS implemented in 2004, employees were given the facility that they could invest 10 percent of their salary (Basic + DA) by the government, under this scheme, the same share (10 percent) was of the government. By investing this money in the stock market, a provision was made to give 60 percent of the amount as lump sum and the remaining 40 percent as pension at the time of retirement of the employees. This amount was different from the amount received as gratuity.
However, this pension scheme did not have the security that if any employee has a fixed salary, then how much money and pension will he get on retirement? This is the reason why this scheme has been opposed. However, in 2014, the central government increased its contribution from 10 percent to 14 percent.
UPS has pension guarantee
Unlike NPS, UPS has a fixed pension guarantee for central employees. This pension will be 50 percent of the average salary of the last 12 months of their service period. However, to get this benefit, it is mandatory for the employees to complete a service period of 25 years. Employees who do not complete the period of 25 years will be given pension on the basis of other rules. A minimum pension of Rs 10,000 has also been arranged for them.
Along with this, a provision has been made to include dearness allowance in the pension of employees under UPS. It will be calculated on the basis of ‘All India Consumer Price Index for Industrial Works’ (AICPIW).
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