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 designed to remove limitations of the OPS and the NPS and provide better benefits to the employees. Responding to the opposition claim of 'rollback government' she stated that the government will not rollback reformed pensions, laboring the criticism made by the Congress party as mere sloganeering.
Under the UPS, civilizing Central government employees are entitled to receive an assured pension equivalent to 50 percent of one's average of the basic pay drawn during the last 12 months of service or the actual amt last drawn whichever is higher, provided that he has rendered minimum of 25 years of service. Also from the financial year next April, it will provide for early commutation too although the pensions of members who retire early will be based on pro rata of their service of less than 25 years.
Additional features of the UPS include
- A pension at least Rs 10000/- per month in case of attaining the age of superannuation after giving a minimum service of 10 years.
- A death in service scheme that allows a family pension provision that will give the company's pension to the family of the deceased employee at 60%.
- The actual cost for implementation of UPS will be around Rs 800 crore for arrears and cost for UPS will be estimated to about Rs 6,250 crore in the first year.
At the same time, Sitharaman provided hints at what is to be expected in the GST Council meeting to be held on September 9 where the focus will be put on the rationalization of taxes. But no action will be taken now as the group of ministers will be further working on the report.
The government has promised to look for opportunities to improve pension benefits and at the same time also control expenditures as seen by the setting up of a ministerial committee by TV Somanathan in March of 2023. The mandate for the committee was to enhance the benefits available to the members of NPS without going back to the OPS.
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