The Centre last year announced the Unified Pension Scheme (UPS), assuring a guaranteed pension for central government employees covered under the National Pension System (NPS). It, however, clarified that the NPS will remain available for those who do not want to switch to the UPS.
Amidst continuous demands from various labour organisations and other stakeholders to bring back the Old Pension Scheme, the Centre tried to give employees a middle ground combining some of the features of both NPS and OPS options. While NPS comes with a benefit of high pension growth potential due to its investment structure divided between primarily equity and debt, OPS gives employees an assurance of stable pension post retirement.
Despite the PFRDA recently coming out with a detailed draft explaining all the guidelines, terms and conditions regarding the new scheme, queries are still being raised by many with regard to regulations.
A parliamentarian recently posed queries to the government asking if the UPI is being brought in place of the existing National Pension Scheme and whether it is true that a committee has been constituted with representatives from government and employees to thrash out contentious issues.
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The member also enquired about the report and the recommendations made by the committee and status of implementation of the same.
Answering the queries, Minister of State for Finance Pankaj Chaudhary said a committee was set up under the chairmanship of Finance Secretary for suggesting measure to modify the National Pension System (NPS) with a view to improve the pensionary benefits of government employees keeping in view the fiscal implications and impact on overall budgetary space.
The committee had extensive discussions with the major stakeholders including Staff Side of the National Council (JCM) and State Government’s, the minister said. “Based on the recommendations of the committee, the Union Cabinet approved the Unified Pension Scheme (UPS) on 24.08.2024. The UPS has been notified on 24.01.2025 for implementation from 01.04.2025.
Key features of the Unified Pension Scheme (UPS)
The UPS aims to provide better financial security to government employees after retirement. Some of its main features include:
Guaranteed pension:
Under the UPS, pensioners will receive 50% of their average basic pay (from the last 12 months before retirement) as a pension,
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