Prime Minister Narendra Modi‘s government on Saturday introduced a new scheme amidst the ongoing controversy over pension. This pension scheme of the Modi government has been named Unified Pension Scheme (UPS). It has been introduced as an alternative to the existing National Pension Scheme (NPS). The government claims that about 23 lakh people are going to get direct benefit from this pension scheme. Let us know who is going to benefit from this pension scheme brought by the central government and how can its benefits be availed…
Why did the new pension scheme need to be introduced?
First of all, it is important to know why the government needed to introduce UPS i.e. Unified Pension Scheme? Actually, the National Pension Scheme (NPS) was started for government employees about two decades ago in place of the old pension scheme (OPS). The National Pension Scheme was implemented from January 2004. In the recent years, dissatisfaction grew among government employees regarding NPS and it became a big election issue. Many states decided to withdraw NPS and go back to OPS.
Scheme prepared on the suggestions of Somanathan Committee
The Modi government formed a committee amid the growing demand to reinstate the old pension scheme and the growing opposition to the National Pension Scheme (also called the New Pension Scheme). The Finance Ministry formed a committee last year under the leadership of Finance Secretary TV Somanathan to review the pension scheme and suggest alternatives. Keeping in mind the dissatisfaction of government employees, the Somanathan committee prepared a suggestion for an alternative pension scheme, on the basis of which the Modi government has now introduced the Unified Pension Scheme i.e. UPS.
Which government employees can avail the benefit?
Since UPS has been introduced as an alternative to NPS, every government employee who was eligible for NPS is eligible to avail its benefits. In simple words, every government employee who started working after 1 April 2004 can avail the benefits of the Unified Pension Scheme. Its benefits will start being available from the next financial year i.e. 1 April 2025. In the Unified Pension Scheme, the government has guaranteed a minimum pension. The Unified Pension Scheme can be defined by three words ‘Assured Pension, Minimum Pension, Assured Family Pension’.
Will retired employees also get benefits?
Although this scheme will be implemented from the next financial year, its benefits will also be available to employees retiring before that. Every government employee who started working after April 2004 can get its benefits, even if he has retired till now, or is going to retire before April 2025. Government employees who have retired till now or will retire by 31 March 2025 will get the benefit of arrears.
Will state government employees be able to choose UPS?
Union Minister Ashwini Vaishnav, while giving information about the Unified Pension Scheme on Saturday, said that 23 lakh employees of the Central Government will benefit from this. State governments have also got the option to choose the Unified Pension Scheme for their employees. If all the state governments choose to give the benefit of Unified Pension Scheme to their employees, then the number of beneficiaries can cross 90 lakh. That is, more than 90 lakh government employees across the country can get direct benefit from this pension scheme.
Will you automatically get the benefit of UPS?
The government has not made the Unified Pension Scheme the default pension scheme, but has introduced it as an alternative to the existing National Pension Scheme. This means that all eligible employees will not automatically get the benefit of the Unified Pension Scheme. All eligible government employees will get the option of Unified Pension Scheme along with the National Pension Scheme. That is, if an employee wants to remain in NPS, then he can remain in the existing system, but if he wants to avail the benefits of the new Unified Pension Scheme, then for that he will have to choose the option of UPS.
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