UPSvsNPSvsOPS: It is being said that government employees will first get the benefit of OPS, then NPS, and now UPS

UPSvsNPSvsOPS: It is being said that government employees will first get the benefit of OPS, then NPS, and now UPS. But how are these three different from each other and which employee will get the benefit of which pension scheme, know here.

What is Unified Pension Scheme: After a long time, the central government on Saturday announced a new pension scheme for government employees. People who have joined government jobs after 2004 will benefit from this. The pension scheme named Unified Pension Scheme (UPS) talks about guaranteed pensions. Employees who joined government jobs after 2004 will now have the option to join UPS instead of NPS. However, there was a demand from the employees to implement the Old Pension Scheme (OPS). After the government approved UPS, employee organizations say that the new pension scheme is just like OPS. But what will change now, let us know the questions related to this and their answers.

Question: Is this a reversal in the pension policy? How is UPS different from NPS?

Answer: Employees who joined the Central Government in 2004 and after that do not get the benefit of the Old Pension Scheme (OPS). Under OPS, one gets a pension of half of the last salary for life and the pension keeps increasing every six months according to inflation. Instead, employees had to join the New Pension Scheme (NPS). Both the employee and the government contribute to NPS. Earlier the government used to share 10% but now it has become 14%. This money is invested in government bonds, shares, and bonds of companies. It works like mutual funds. When an employee retires, he has to buy a pension scheme with at least 40% of his money. Now in the Unified Pension Scheme (UPS), the government has promised that those who work for 25 years or more will get half the pension of the average salary of the last 12 months. The husband or wife of the retired employee will be given the benefit of a 60 percent pension as a family pension. If an employee works for 10 years, he will be given a pension of at least Rs 10,000 every month. Apart from this, a lump sum amount will be received on retirement. However, this depends on how many years the person has worked.

Question: Why this change?

Answer: After the approval of the New Pension Scheme (NPS) in the year 2004, most of the states opted for it. But year after year, the pressure on the governments to restore the Old Pension Scheme (OPS) increased. States like Rajasthan, Himachal, Jharkhand, and Punjab left NPS and returned to OPS. In Himachal, people believed that OPS was the main reason for the victory of the Congress. The central government refused to bring back the old pension scheme. The Center said that this would put a burden on future generations. After losing the elections in March 2023, the government formed a committee. This committee was headed by TV Somanathan. Looking at the method of the Andhra Pradesh government, the committee decided that they would give 50% pension.

Question: Will most government employees opt for UPS?

Answer: Somanthan said on Saturday that most government employees will benefit from UPS except for a few exceptions. If you work for 30-35 years, your money will be largely protected from market fluctuations. You can decide for yourself whether your money should be invested in government bonds, shares, or corporate bonds. If you are under 35 years of age, up to 50% of your money can be invested in shares. But as you grow older, the money invested in shares will decrease. At the age of 55, most of your money will be in government bonds, with only 10% in shares and corporate bonds. A lot of money is needed to buy a pension scheme in the country, because the pension rate is low. Therefore, it may be difficult for many government employees to get 50% pension. But if the government promises to give 50% pension, it will be good for government employees, because most government employees do not like to take risks.

Q: Is this change a step backwards from OPS?

Answer: No, it is not like that. The new pension scheme i.e. UPS will also work like NPS. But some changes are being made by the government so that you do not have to spend more money. The government will only do this that if your money is reduced in the market, then it will give you the remaining money to give you 50% pension. Apart from this, people who work for 10 years will get a pension of at least Rs 10,000 per month. Apart from this, you will also get the benefit of lump sum money on retirement. Government employees will also not have to fear inflation, whereas those working in the private sector are affected by inflation.

Question: Is UPS free of finance?

Answer: 'In the Old Pension Scheme (OPS), the government did not keep money in advance. But the Unified Pension Scheme (UPS) is a pension scheme based on annuity based calculation. In the Unified Pension Scheme (UPS), the government will first calculate how much money will be needed in the future. Somanathan said that this calculation will be done every three years.