Unified Pension Scheme: The central government has now brought the Unified Pension Scheme (UPS) for central employees in place of the New Pension Scheme (NPS). Union Minister Ashwini Vaishnav gave this information on Saturday, 24 August. He said that it was approved in the cabinet meeting. UPS will be implemented from April 1, 2025.
23 lakh central employees will benefit, will be implemented from April 1, 2025: 23 lakh central government employees will benefit from UPS. Employees will have the option to choose any pension scheme from UPS or NPS. If the state government wants, they can also adopt it. If the state employees join, then about 90 lakh employees will benefit from it.
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The central government has now brought the Unified Pension Scheme (UPS) for central employees in place of the New Pension Scheme (NPS). Union Minister Ashwini Vaishnav gave this information on Saturday, 24 August. He said that it was approved in the cabinet meeting. UPS will be implemented from April 1, 2025.
23 lakh central government employees will benefit from UPS. Employees will have the option to choose any pension scheme from UPS or NPS. If the state government wants, they can also adopt it. If the state employees join, then about 90 lakh employees will benefit from it.
PM also attended the meeting
Before the cabinet meeting, Prime Minister Narendra Modi held a meeting with the leaders of central employees at his residence. The Personnel Ministry had issued a notice in this regard on August 21. This meeting took place at a time when assembly elections are to be held in two states Jammu and Kashmir and Haryana.
This was the first meeting in the last 10 years in which the Prime Minister and the members of the National Council of Central Employees i.e. Joint Consultative Machinery (JCM) participated. In the meeting, Old Pension Scheme (OPS), New Pension Scheme (NPS) and 8th Pay Commission were discussed.
Finance Minister Nirmala Sitharaman also talked about reforms in NPS while presenting the budget. At the same time, in response to a question asked in Parliament, Minister of State for Finance Pankaj Chaudhary replied that the government is not considering any restoration of OPS.
Know what is the Unified Pension Scheme, which was approved by the Modi Government?
Union Minister Ashwini Vaishnav said in a press conference that after looking at the schemes in countries around the world and discussing with many people, the Unified Pension Scheme was suggested. After which the cabinet has approved it. Ashwini Vaishnav said that government employees can take whichever scheme they want in NPS and UPS. In such a situation, employees will be able to take advantage of one of the two pension schemes.
Opposition does politics regarding OPS- Ashwini Vaishnav
Ashwini Vaishnav said that the opposition has been doing politics only on the old pension scheme. Because, there was a constant demand for improvement in the new pension scheme. Only after this, Dr. Somanathan’s committee was formed. 23 lakh employees of the central government will benefit from this scheme. At the same time, the government’s contribution in UPS will be 18.5%. This scheme will be implemented from April 1, 2025.
Know the 4 important points of this scheme?
– The employees were demanding an assured amount. Under UPS, employees will be given 50% assured pension after retirement. This will be 50% of the average basic pay of 12 months before retirement.
– Employees will get this pension only after 25 years of service.
– If an employee dies, there will be a provision for family pension under this scheme. Under this, 60 percent of the pension received will be given to the family.
– If the service of an employee is less than 25 years, then he will get a pension of Rs 10,000 per month.
Unified Pension Scheme: Understand How the New Pension System Differs from NPS
With the approval of this decision of the Union Cabinet, the years-old demand of lakhs of employees seems to be fulfilled. Under UPS, retired employees will be given 50 percent of the last salary as pension. The new pension system will be implemented from April 1, 2025. Explaining the decision, Information and Broadcasting Minister Ashwini Vaishnaw said that the New Pension Scheme will also continue. Employees will have the freedom to choose either of these two schemes. In such a situation, today we are going to tell you in detail about these two pension schemes.
Know what will be special in the Unified Pension Scheme
- The Narendra Modi government at the center has made provision for assured pension in UPS.
- Assured Pension: In this, employees who have worked for 25 years will be able to get 50 percent of the average basic pay of the last 12 months of their service as pension.
- Family Pension: If an employee dies during employment, then 60 per cent of his basic pay will be given to his family as family pension.
- Minimum Pension: Provision of minimum pension has also been made in UPS. Under this, people who have completed 10 years of service will be given a minimum pension of Rs 10,000.
- Indexation Benefit: Under the new rules, the benefit of Indexation Benefit will also be available in pension, minimum pension and family pension.
- Gratuity: After completing every 6 months of service, 1/10th of the salary and dearness allowance will be added to the gratuity. This payment will not reduce the amount of assured pension.
Know what is New Pension Scheme or National Pension System
- National Pension Scheme is also known as New Pension Scheme. It was started in 2004. After this, in 2009, this scheme was also opened for the private sector.
- NPS is managed by the Pension Fund Regulatory and Development Authority (PFRDA).
- In this you get pension on the basis of investment.
- After withdrawing a small amount at the time of retirement, you can take the remaining amount as monthly income. This way you keep getting some amount every month even after retirement.
- NPS is divided into Tier 1 and Tier 2 accounts. Those who choose Tier 1 accounts can withdraw some amount only at the time of retirement. However, Tier 2 account holders are allowed to withdraw some money before retirement.
- According to section 80 CCD of the Income Tax Act, one gets the benefit of tax exemption on investment up to Rs 1.5 lakh. Also, there is no tax on withdrawal of 60 percent of the NPS amount.
AIDEF boycotted the meeting
All India Defence Employees Federation (AIDEF), the largest organisation of central employees after the railways, boycotted the Prime Minister’s meeting. AIDEF General Secretary C Srikumar had said that the organisation will not participate in the meeting with PM Modi.
The reason for this is that the discussion in the meeting will not be about restoration of OPS but about reforms in NPS. The organizations have already said that employees want only OPS. Let us tell you that AIDEF had also boycotted the meeting of the Finance Ministry on 15 July.
The employee organizations had written a letter to Prime Minister Modi on 29 February 2024 regarding the restoration of OPS. The letter demanded that the government should stop NPS and implement the Guaranteed Old Pension Scheme. If the demand is met, the organizations had talked about an
indefinite strike from 1 May 2024. Later, the strike was postponed after getting assurance of discussion from the government.
Somanathan committee was formed to improve NPS
In April 2024, the government constituted a committee to reform the NPS under the chairmanship of the then Finance Secretary TV Somanathan (recently appointed Cabinet Secretary). The committee has studied the pension schemes of countries around the world as well as the reforms done by the Andhra Pradesh government for reform.
It was revealed that the government may be able to guarantee 40-45% pension. After this, news came recently that the government can guarantee 50% pension of the last salary to central employees.
In simple words, if the last salary of an employee before retirement was Rs 50 thousand, then the government is planning to give him a pension of Rs 25 thousand every month.
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