Quick Summary
In a media briefing session held a few days ago, Union Finance Minister Nirmala Sitharaman shed more light on the newly rolled-out Unified Pension Scheme (UPS) to state that, the exercise of the scheme is in fact an optional one. However, since the government expects people to avail the new facility in a big way, Sitharaman said that the decision to join the UPS is optional for states, adding that the UPS is only an improvement and option to the current National Pension System (NPS). The UPS is
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FAQ :
No, Finance Minister Nirmala Sitharaman has clarified that the UPS is an optional improvement and an alternative to the current National Pension System (NPS), not a rollback.
The decision to join the UPS is optional for states, although the government expects significant uptake.
Employees are entitled to an assured pension of 50% of their average basic pay over the last 12 months of service (or last drawn pay, whichever is higher) after 25 years of service. It also includes provisions for early commutation, a minimum pension of Rs 10,000 per month after 10 years of service, and a family pension of 60% in case of death during service.
The UPS is designed to remove limitations of both the Old Pension Scheme (OPS) and the NPS, offering better benefits to employees.
The estimated cost for arrears is around Rs 800 crore, and the cost for the UPS itself is estimated at about Rs 6,250 crore in the first year.
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