Central government employees and unions associated with them have long been demanding that the Centre bring back the Old Pension Scheme (OPS), which was replaced in January 2004 with the National Pension System (NPS). One of the key arguments these central employees and unions have been making is that the OPS gave them the minimum and assured pension guarantee, which was missing under the NPS. Given this, the Centre tried to find a middle ground through the Unified Pension Scheme (UPS), blending some of the key features from both pension schemes – OPS and NPS. Like OPS, UPS guarantees an assured pension for employees on retirement.
The Centre announced the UPS last August and has issued detailed operational guidelines recently about the programme’s framework, timeline, and implementation. The scheme, to be launched on April 1, aims to address the key concern raised by government employees regarding the NPS, and that is an assured pension for employees.
Recently, many questions related to UPS were raised in Parliament, including its impact on existing NPS subscribers.
One member of parliament, Dharmendra Yadav, asked the government to inform the House about the timeline for full implementation of UPS and the manner in which it is likely to impact the existing NPS subscribers. He also sought to know about the long-term financial viability of the UPS against the NPS. The member also raised a query about the difference between investment flexibility in NPS and UPS.
Also read: UPS: Not all government employees will get gratuity benefit of Rs 25 lakh – Know why
Now, let us know about the government’s stand on these matters and also understand important things related to the UPS.
In response to above questions, Minister of State for Finance Pankaj Chaudhary said that UPS has been notified by the government as an option under NPS with the objective of providing assured monthly payout after retirement to the central government employees covered under the NPS. “The UPS has been envisaged to address the demand of the employees covered under NPS regarding assured pension after retirement, while ensuring a fiscally responsible funded and contributory pension scheme.”
Talking about the UPS financial viability, the minister said that UPS is defined contribution scheme with elements of defined benefit. It relies on the regular and timely accumulation and investment of applicable contributions (from both the employee and the employer) for assured payout to the employees,
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