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Talking about the major difference between National Pension Scheme and Integrated Pension Scheme, when an employee contributes 10 percent of his salary to NPS and the contribution made by the government is 14 percent, then the total amount deposited in the NPS account is up to 24 percent of the employee's salary. Whereas, in UPS, the employee contributes only 10 percent, but the contribution from the government is not 14 percent but 18.5 percent. Overall, 28.5 percent of the salary will be deposited in the UPS account.
Calculation of pension
Now let's talk about how an employee can get more pension through UPS than NPS. So let's understand it on the basis of calculation. First of all, let's talk about how much fund an employee earning Rs 50,000 per month will be able to collect in both the schemes (government schemes).
Based on a salary of Rs 50,000 in NPS, the employee's 10 percent contribution per month will be Rs 5,000 and on this 14 percent, the government will get a contribution of Rs 7,000. This will make the deposit in the NPS account Rs 12,000. National Pension Scheme is a stock market linked scheme, in which 60 percent of the amount is paid as a lump sum at the time of contribution and the remaining 40 percent is paid as an annuity. Suppose it gives a return of 9 percent and the deposit grows at the rate of 5 percent per annum and the return on annuity is 6 percent, the total fund in NPS in 35 years will be Rs 3,59,01,414. Out of this, there will be about Rs 1.43 crore. In this account, you will get Rs 77,000 every month as pension.
This is how you will get pension from UPS
Whereas in UPS, the entire amount of the account will remain with the government. In return, the employee will be paid a lump sum of 10 percent of the salary on completion of every 6 months of service. There will be 70 half years in 35 years of service. If we consider the average salary as Rs 50,000, then you will get Rs 30,000 every half year. In this way, on completion of 60 years, you will get a total of Rs 21 lakh at once. However, this amount will also increase with salary increase. Apart from this, the pension will be 50 percent of the average basic salary of the last 12 months.
If you calculate 35 years of service, the starting salary is Rs 50,000 and suppose your basic salary becomes Rs 1,00,00 by the last 12 months of service, then your pension amount will be Rs 50,000 per month and if now 50% Dearness Relief (DR) is added to it, then the total pension becomes around Rs 1,0000. In such a case, you will get more pension in UPS than in NPS.
