Budget 2025: Last year, the Centre announced the Unified Pension Scheme for central government employees, blending key features of the Old Pension Scheme (OPS) and the National Pension System (NPS). However, the move failed to deter employee unions from continuing their demand for a full restoration of the OPS.
The Unified Pension Scheme (UPS) is set to be implemented from April 1, 2025. Experts believe that despite the ongoing agitation by employee unions, the government may not revamp the features of UPS to address the concerns of employees and pacify their unions.
Unions adamant about demand for OPS restoration
Despite the UPS announcement, some employee unions are adamant about their demand for the restoration of the OPS, which guarantees a pension equivalent to 50% of the last drawn salary after retirement. Under the OPS, there was no provision for any monthly contribution from employees. On the other hand, UPS will make employees contribute 10% of their basic salary monthly towards the scheme, while the government will contribute 18.5%.
A section of employees remains dissatisfied with UPS due to its self-contribution feature. These employees are demanding the restoration of the OPS, which did not require any monthly salary contribution.
Also read: Centre to restore Old Pension Scheme for central govt employees? Key highlights from massive OPS rally
UPS has not resolved the ongoing dissatisfaction among some employee groups, say experts, adding that many unions continue to demand the restoration of the OPS, which did not require self-contribution.
Rajeev Gupta, Executive Vice President & Business Head – E-Governance, Religare Broking Limited, noted that the UPS is “not only attractive but also adds a fiscal outlay of Rs 6,250 crore.” The new scheme allows all government employees to shift to UPS in the upcoming financial year, promising guaranteed pensions, inflation adjustments, and robust family benefits.
By addressing key employee concerns while balancing fiscal prudence, the UPS stands out as a significant innovation in government pension policy.
Gupta further said, “The purpose of any government-aided pension scheme is to strike a balance between retirement planning and fiscal prudence. With the introduction of UPS, the government has conducted a balancing act towards both goals.”
Difference between UPS, NPS, OPS
Here’s a simple breakdown to help you understand the key differences:
- Pension Amount
UPS: 50% of the average basic pay from the last 12 months.
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