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NPS vs UPS vs OPS: The Modi government at the Centre has recently launched a new pension scheme called Unified Pension Scheme (UPS). This pension scheme is an updated version of the National Pension Scheme (NPS) implemented since 2004. In 2004, the then Atal Bihari Vajpayee government of BJP implemented the National Pension Scheme. After this, all the government and non-government employees of the country started opposing this pension scheme. The main reason for the opposition to NPS was that this scheme was subject to the stock market.
Why bring UPS?
In April this year, a committee was formed under the leadership of former Finance Secretary Dr. Somnath to brainstorm on the problems of employees related to NPS. The committee talked to almost all the states and labor unions. It was only after this entire process that the committee recommended the Integrated Pension Scheme, which was approved by the government last Saturday.
Why use UPS
How is this pension scheme different from the old pension scheme NPS? If different, then how different and why should employees adopt this pension scheme? This question must be arising in the mind of almost every employee and he would want an answer to it. In this entire matter, IANS wanted to know from the experts whether employees should leave NPS and adopt UPS?
This led to protest
Shiv Gopal Mishra, general secretary of Eastern Railway Men's Union (NRMU) in All India Railway Federation, jokingly says that NPS was a 'no pension scheme'. NPS was a contributory scheme in which the employees' money was invested in the market. No one knows much about it. This scheme was dependent on the fluctuations of the market. Under this scheme (NPS), people get only ₹ 800, ₹ 1000, ₹ 1500 and ₹ 2000 as pension.
He further said that the employees did not like the NPS scheme at all. This is the reason why the employees were so angry. NPS was a completely different scheme from UPS. There is no guarantee of fixed pension to any employee in NPS. Therefore, there is no competition between UPS and NPS in any way.
On how the Unified Pension Scheme is different from UPS, Shiv Gopal Mishra says how the old pension scheme is different from OPS.
Shiv Gopal Mishra says that the Unified Pension Scheme is a contributory scheme, whereas in the old pension scheme there was no contribution from the employees, it was based on their service time.
UPS is better than OPS
Apart from this, in the case of family pension, Shiv Gopal Mishra considers the Unified Pension Scheme to be better than the old pension scheme. He says that in the old pension scheme till 2004, the family pension was only 40 percent of a person's total pension, whereas in the Unified Pension Scheme it has been increased to 60 percent. Which is a very good step of the government. This will greatly benefit the employees and their families.
Is this pension scheme so good that employees should leave NPS and upgrade to UPS? Answering this question, he says that almost all employees will value this pension scheme more than NPS and will shift to it. Employees will suffer a lot due to NPS, because there will be no increase in NPS pension with inflation, which will cause a lot of loss to the employees.
These benefits are available in UPS
He further says that dearness allowance on pension amount is very important. Because if it is not so, the market value will increase but the pension will not increase, which will destroy neutrality. Then later on the employee will come to the brink of starvation. Considering this, this is 100% a very good decision.
But will the matter be put to rest with the government increasing its contribution to UPS to 18.5 per cent and approving the old pension scheme, which is being implemented in many states of the country, talking about all pension holders? Because many opposition parties promise to retain the old pension scheme in every election. Answering this question, he said that after the decision of the central government, the state governments will also be bound to implement the integrated pension scheme. Although the state government is talking about implementing the old pension scheme, no government has implemented it yet. Implementing UPS will be a good thing because it is a very good scheme which will benefit the employees a lot. However, Finance Minister Nirmala Sitharaman clarified on Wednesday in response to a question from journalists that it will not be mandatory for any state to implement UPS.
Welcome to UPS.
However, on this subject, Shivgopal Mishra says that the Congress government of Karnataka has welcomed this pension scheme on Monday and this decision of the central government will largely eliminate or reduce the demand for the old pension scheme of workers in the states.
23 lakh government employees benefited
Under the Unified Pension Scheme, about 23 lakh central government employees will benefit, while on the one hand there were two employee accounts under NPS – Tier 1 and Tier 2. Anyone can open them and invest. Whereas UPS is a fixed pension scheme. Along with this, people will also get the guarantee of family pension and minimum pension, which is not there in NPS.
What are the benefits of NPS
The old pension scheme NPS, which was implemented in 2004 after the closure of OPS, gave the employees the facility to invest 10 percent of their salary (basic and DA) on behalf of the government, only this much contribution could be made under this scheme. This scheme (10 percent) remained with the government. By investing this money in the stock market, a provision was made to give 60 percent of it as lump sum and the remaining 40 percent as pension to the employees at the time of retirement. This amount was different from the amount received as gratuity.
However, this pension scheme did not have the security that if an employee's salary is fixed, then how much money and how much pension will he get on retirement? Due to this, the scheme continued to face opposition. However, in 2014, the central government increased its contribution from 10 percent to 14 percent.
Pension Guarantee in UPS
Unlike NPS, UPS has a fixed pension guarantee for central employees. This pension will be 50 percent of the average salary of the last 12 months of their service period. However, to get this benefit, it is mandatory for the employees to complete 25 years of service. Employees who do not complete the period of 25 years will be given pension as per other rules. A minimum pension of Rs 10,000 has also been arranged for them.
Along with this, a provision has been made to include dearness allowance in the pension of employees under UPS. It will be calculated on the basis of 'All India Consumer Price Index for Industrial Works'.
