In the Union Cabinet meeting, the central government approved the Unified Pension Scheme (UPS), a major gift to government employees. The Old Pension Scheme (OPS) and National Pension System (NPS) will be replaced with a new pension system, according to government announcements. As a result, current pensioners now have the choice between the UPS scheme and the NPS and OPS. All government workers hired after April 2004 are eligible to participate in this new pension scheme.
What Is UPS scheme?
Last Saturday, August 24, the Modi administration at the federal level approved the Unified Pension Scheme. The Unified Pension Scheme (UPS) is the name of this Central Government pension plan. The Central has been accused by the opposition for a long time regarding the National Pension System and the opposition leaders were saying that the government is not giving the pension due to the government employees through the National Pension System.
Government employees may receive pay
increases of up to 19% by using UPS. The new pension plan will be very beneficial to government employees who subscribe to UPS, according to the central government. This is mostly because the government will now contribute 18.5 percent of UPS’s pension fund instead of the existing 14 percent. UTI Pension Fund has reportedly polled for Times of India, per news reported in Times of India (ToI). This means that government workers will receive a direct benefit of 19% of their pay. There are, however, some guidelines for this as well. For example, the employee’s monthly pay cannot exceed Rs 50,000, only then will he be able to become its beneficiary.
The report states that currently,
employees can see an increase of 3 percent in their annual salary hike through this scheme. That is, it will increase to a CAGR of 8 percent i.e. Compound Annual Growth Rate. However, the UTI report does not include the employees’ dearness allowance and pay commission awards. Therefore, according to the calculations done, the pension corpus or pension fund can be even higher.
When is the Unified Pension Scheme (UPS) going to be put into effect?
Government employees will get a fixed pension under this program after they retire on April 1, 2025. Although the Unified Pension Scheme is not the government’s default pension plan, it is an option for the National Pension Plan that is now in place. This pension plan directly benefits more than 90 lakh government workers nationwide.
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