– A new Unified Pension Scheme (UPS) will be implemented starting 1 April 2025 for central government employees as an alternative to the existing National Pension Scheme (NPS).
– UPS offers a guaranteed fixed pension amounting to 50% of average basic pay for employees with minimum 25 years of service, with a minimum assured pension of Rs 10,000 per month for those with at least 10 years of service.
– NPS is market-driven and does not guarantee a fixed pension, with the final amount subject to market performance.
– UPS includes inflation protection through indexation based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).
– UPS has a higher government contribution of 18.5% compared to 14% under NPS.
– UPS guarantees a family pension of 60% of the employee’s pension in the event of their death, while NPS family pension is determined by the accumulated corpus and annuity plan selected.
– UPS is designed for central government employees while NPS has been expanded to include private sector employees as well.
– UPS offers a more predictable and secure option for retirees with guaranteed returns and inflation adjustments, while NPS lacks guaranteed returns.
– Current government employees enrolled in NPS will have the option to transition to UPS, potentially allowing them to receive arrears with interest.