The Unified Pension Scheme (UPS) recently announced for central government employees seems to strike a balance between the Old Pension Scheme (OPS) and the National Pension Scheme (NPS), offering a mix of benefits. The UPS combines the employee contribution aspect of the NPS with the assured pension aspect of the OPS, with the government increasing its contribution from 14% to 18%. The scheme will cost the exchequer an additional Rs 6,250 crore, but will ensure a minimum pension of Rs 10,000 for employees with a minimum service of 10 years.
Additionally, employees will receive 50% of their average salary from the last 12 months of service, providing them with a decent retirement package. While the UPS may not match the benefits of the OPS entirely, it is still a significant step towards addressing the pension concerns of central government employees. This move by the Modi government could be seen as a response to criticism and challenges faced over the pension issue, ultimately offering a promising solution for employees’ future financial security.
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