The central government recently announced the Unified Pension Scheme as a replacement for the Old Pension Scheme (OPS) and New Pension Scheme (NPS).
We are seeing a divided response from trade unions while some are in favor of UPS and majority showed dissatisfaction and demanded the restoration of OPS.
Major central trade unions like the All India Trade Union Congress (AITUC) and the Centre of Indian Trade Unions (CITU) have rejected UPS. While, trade unions related to RSS such as Bhartiya Mazdoor Sangh state that the unified pension scheme is similar and more beneficial for the employees and they also decided the wait on commenting before all the details are out of UPS.
Benefits of the Unified Pension Scheme
Under the new UPS scheme, 25 lakh central government employees will be benefitted. The new UPS scheme says that after 25 years of service, the employees will get a fixed amount that is 50% of the 12-month average of their basic pay + Dearness Allowance (DA). Under this scheme, 10% of the amount will be deducted from the salary, and 18.5% amount will be the contribution from the government.
Previously, under the old pension scheme, no amount had to be deducted from the employee’s salary and the government contribution was 14%.
The calculation of pension under OPS was 50% of the basic amount of the last withdrawn salary + Dearness Allowance (DA).
Minimum Pension Under UPS
Under the new UPS, if the employee has completed their 10 years of employment then they are assured to get a minimum of Rs. 10,000 per month. Right now employees get Rs. 9000 on their minimum 10 years of service.
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Conclusion
According to the government, 99% of the employees will happily switch new Unified Pension Scheme. We are yet to receive all updates on UPS from the government but this scheme looks better than the current NPS and previous OPS.