New Delhi: After the announcement of the 8th Pay Commission, now the decision to implement the Unified Pension Scheme i.e. UPS has also been taken. UPS will be implemented from April 1, 2025. At present, the current minimum pension of central government employees is Rs 9,000. Let’s take a scenario, in which the fitment factor 2.86 is implemented, then there will be an increase of about 186 percent in pension.
If we take the examples of previous pay commissions, then there is a possibility that 8th Pay Commission could give the green signal to 20-30 percent increase in pension. However, one must remember that these are only reports and assumptions and the actual increase will be finalised on the basis of the Commission’s recommendations and budget allocation.
In 7th Pay Commission, the fitment factor was increased by 2.57 and with the same fitment factor, the pension was increased by 23 to 25 percent.
What is the difference between UPS and NPS?
- The government employees are eligible for UPS. The NPS is available to both private and government employees.
- In UPS, 10 percent basic and DA will be deducted from the employees’ salary and 18.5 percent contribution is made by the government. In NPS, the deduction is made from the employee’s salary.
- In UPS, the beneficiary gets a lump sum amount after retirement. In NPS, there is no facility of government provident fund. At the time of retirement, 60 per cent of the amount contributed to NPS is given as lump sum and the remaining 40 per cent is given as annuity. It may be noted that NPS is a stock market-linked scheme.
- In UPS, fixed pension is assured after retirement. The beneficiaries will be eligible to receive 50 per cent of the average basic pay of 12 months, whereas in NPS there is no guarantee of fixed pension.
- In UPS, pension will be given according to inflation, it is linked to Dearness Relief (DR), whereas in NPS there is no provision of any dearness allowance.
- The UPS beneficiaries will get at least Rs 10000 pension after completing 10 years of service, whereas there is no such rule in NPS.
- Medical facilities will be available in UPS. There is no such provision for this in NPS.
Government employees can now choose between UPS and NPS, but those who have once chosen NPS cannot switch to UPS again.
The Indian government’s implementation of the Unified Pension Scheme (UPS) from April 1, 2025, following the 8th Pay Commission, offers government employees a choice between UPS and NPS. UPS guarantees a minimum pension, inflation adjustments, and medical benefits, unlike the market-linked NPS. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
