The Union Cabinet headed by Prime minister Narendra Modi has approved the Unified Pension Scheme or UPS. As per government statement the decision to implement UPS has taken after consultation and 100s of meetings with RBI, World Bank and other government department unions.
What is the difference between old pension scheme and Unified Pension scheme or UPS
In the UPS the pension will be calculated by adding 50% of basic pay and the prevalent DA. It means first average the last 12 months basic pay before retirement and then half of it and then add DA.
That means it is same as UPS is same old pension scheme because in old pension scheme we also calculated the same way. So the difference between old pension and the Unified Pension scheme is that pension amount per month will be same. But in old pension scheme no amount was deducted per month from salary for the pension but in UPS or NPS now every month 10% of basic pay is deducted for pension. Yes government also contributes to 14% in that. Government now has announced that in UPS the Govt contribution will increased to 18%.
In Old Pension Scheme OPS, no amount was deducted from salary for pension. A person can volunteerly deduct some amount from salary in the form of GPF. After retirement the GPF is returned back to employee that he has accumulated on his entire service. Pension was seperate from GPF. So in OPS when a employee retires he gets pension per month and he gets 4 things 1. GPF 2. Gratuity 3. Leave Encashment 4. Commutation of pension.
In UPS after retirement, he will get pension per month 1. Gratuity 2. Leave Encashment. But no GPF and govt has not yet disclosed the Commutation of pension for UPS employees. One more thing if anyone want to choose between NPS and UPS he will get only one time option.
The Government Notification for UPS
SchemePosted On: 24 AUG 2024 8:33PM by PIB Delhi
Cabinet approves Unified Pension The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the Unified Pension Scheme (UPS).The salient features of the UPS are:Assured pension: 50% of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service period upto a minimum of 10 years of service.Assured family pension: @60% of pension of the employee immediately before her/his demise.Assured minimum pension: @10,000 per month on superannuation after minimum 10 years of service.Inflation indexation: on assured pension, on assured family pension and assured minimum Pension dearness Relief based on All India Consumer Price Index for Industrial Workers (AICPI-IW) as in case of service employees lump sum payment at superannuation in addition to gratuity 1/10th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service this payment will not reduce the quantum of assured pension***
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