The central government has approved the Unified Pension Scheme (UPS). Since the approval of UPS, questions have arisen in the minds of people about whether it would be better to shift from NPS or stay in it. Today we will tell you whether there will be any benefit or disadvantage in shifting from NPS to UPS. Along with this, we will also tell you what important things to keep in mind before choosing UPS.
In addition, we will outline the key considerations you should make before selecting UPS.
Only those who are currently enrolled in the New Pension Scheme (NPS) are eligible to choose UPS. They also include former workers. Upon retirement following a minimum of 25 years of service, UPS employees are promised a pension equal to 50% of their average basic income during the previous 12 months. However, the quantity received in NPS depends on the returns from the market.
A fixed pension amount
Pension decisions at UPS will be made proportionately after a minimum of ten years of employment. Also, after a minimum of ten years of work, a pension of Rs 10,000 per month is guaranteed upon retirement. Employees used to get 50% of their most recent basic wage as a pension under the Old Pension Scheme (OPS). UPS is a contributory program, nonetheless, meaning that employees must contribute 10% of their base pay and dearness allowance, in contrast to the Old Pension program. The federal government will contribute 18.5% of the total at the same time. In contrast, the employee’s contribution under NPS is set at 10%, and the employer’s contribution is maintained at 14%.
Remember these points
Employees who switch from NPS to UPS are not allowed to return to NPS. In addition, Rs 800 crore is owed to the employees who retire before March 31, 2025, under the NPS. These employees will receive the appropriate payment if they choose UPS. It is predicted to increase the annual burden on the public coffers by Rs 6250 crore. Nevertheless, the cost of this will fluctuate annually due to changes in the workforce.
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