{"id":28361,"date":"2024-08-27T18:19:55","date_gmt":"2024-08-27T12:49:55","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=28361"},"modified":"2024-10-14T10:54:14","modified_gmt":"2024-10-14T05:24:14","slug":"unified-pension-scheme","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/27-08-2024\/unified-pension-scheme","title":{"rendered":"Unified Pension Scheme"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/Government Policy and Intervention<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recently, the Union Cabinet, chaired by the Prime Minister, approved the <strong>Unified Pension Scheme (UPS) by replacing the <\/strong><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/11-11-2022\/national-pension-system-nps\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/ca\/current-affairs\/11-11-2022\/national-pension-system-nps\"><strong>National Pension System (NPS)<\/strong><\/a><strong>.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is based on the recommendations of <strong>T. V. Somanathan Committee<\/strong> (2023), will be effective from April 1, 2025.<\/li>\n\n\n\n<li>The UPS proposes to amalgamate <strong>advantages of both Old Pension Scheme (OPS) and New Pension Scheme (NPS).<\/strong><\/li>\n\n\n\n<li>It represents a <strong>forward-looking approach<\/strong> to retirement planning in India, aiming to provide a secure and sustainable pension system for all eligible employees.<\/li>\n\n\n\n<li>It aims to provide long-term financial security to government employees while maintaining flexibility and choice.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Features of the Unified Pension Scheme (UPS)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Guaranteed Pension: <\/strong>Under the UPS, eligible employees are<strong> assured a pension equal to 50% of their average basic pay<\/strong> drawn over the last 12 months prior to superannuation.\n<ul class=\"wp-block-list\">\n<li>For service periods between 10 and 25 years, the pension will be proportional.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Minimum Qualifying Service: <\/strong>Employees with a<strong> minimum qualifying service of 25 years<\/strong> will receive the full assured pension.\n<ul class=\"wp-block-list\">\n<li>In <strong>case of an employee\u2019s demise, <\/strong>their family will receive an assured pension equal to 60% of the employee\u2019s pension before their demise.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"c2aba3\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"845\" height=\"371\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/08\/super-annuation-jpg.webp\" alt=\"Unified Pension Scheme\" class=\"not-transparent wp-image-28362\" style=\"--dominant-color: #c2aba3; width:566px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/08\/super-annuation-jpg.webp 845w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/08\/super-annuation-300x132.webp 300w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/08\/super-annuation-768x337.webp 768w\" sizes=\"auto, (max-width: 845px) 100vw, 845px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assured Minimum Pension: <\/strong>Upon superannuation after a minimum of 10 years of service, employees will receive an assured minimum pension of Rs 10,000 per month. It ensures a<strong> safety net for retirees.<\/strong>\n<ul class=\"wp-block-list\">\n<li>The UPS promises central government employees who have completed at least 25 years of service a guaranteed pension.<\/li>\n\n\n\n<li>It is calculated as half of their average basic salary over the 12 months preceding superannuation.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Inflation Indexation:<\/strong> The UPS applies inflation indexation to the assured pension, assured family pension, and assured minimum pension.\n<ul class=\"wp-block-list\">\n<li>In the form of Dearness Relief based on All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to service employees.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p class=\"has-background\" style=\"background-color:#ebecf0\">Read our detailed article on <a href=\"Inflation: Meaning, Types, Measures, Effects &amp; More\"><strong>Inflation: Meaning, Types, Measures, Effects &amp; More<\/strong><\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Lump Sum Payment: <\/strong>In addition to gratuity, 1\/10th of monthly salary+ Dearness Allowance for every completed six months of service.&nbsp;<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"d2d1d4\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"292\" height=\"300\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2024\/08\/old-vs-new-jpg.webp\" alt=\"differences between old vs national pension scheme\" class=\"not-transparent wp-image-28363\" style=\"--dominant-color: #d2d1d4; width:386px;height:auto\"\/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Financial Contributions: <\/strong>Employees choosing the UPS will continue to contribute 10% of their salary.\n<ul class=\"wp-block-list\">\n<li>The government\u2019s contribution will increase from 14% to 18.5%.<\/li>\n\n\n\n<li>It ensures that employees do not face any additional financial burden.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Choice Between UPS and NPS<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Central government employees have the option to choose between the UPS and the <strong>National Pension Scheme (NPS)<\/strong>.<\/li>\n\n\n\n<li>Unlike the UPS, the NPS is market-linked.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Similarities to the Old Pension Scheme (OPS)<\/strong><br>&#8211; The UPS shares similarities with the old pension scheme in terms of benefits. However, it <strong>differs significantly in its funding mechanism.<\/strong><br>&#8211; Unlike the OPS, which was a pay-as-you-go program, the UPS is fully funded each year from the budget and absorbed into it. This approach prevents future generations from bearing the burden of pension payments.<br><br><strong>Choice for NPS Subscribers<\/strong><br>&#8211; Employees currently under the National Pension System (NPS) have the option to shift to the UPS.<br>&#8211; NPS, introduced in 2004, is a defined contribution scheme where employees accumulate a retirement corpus based on their contributions.<br>&#8211; UPS provides an alternative for those seeking a more assured pension.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/pib.gov.in\/PressReleaseIframePage.aspx?PRID=2048607\" target=\"_blank\" rel=\"noopener\"><strong>Source: PIB<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recently, the Union Cabinet, chaired by the Prime Minister, approved the Unified Pension Scheme (UPS) by replacing the National Pension System (NPS).<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-28361","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/28361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=28361"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/28361\/revisions"}],"predecessor-version":[{"id":30760,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/28361\/revisions\/30760"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=28361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=28361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=28361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}