(MENAFN- Live Mint) Amid the growing demand for the rollback of the Old Pension Scheme, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved a new assured pension scheme providing 50% of salary for those who joined the service after January 1, 2004.
With the introduction of Unified Pension Scheme , all government employees will now have the choice to continue with the National Pension Scheme or UPS.
From the next financial year, National Pension Schem subscribers who are government employees can opt for the Unified Pension Scheme (UPS) to avail themselves of the assured pension scheme. As the Centre has introduced the option to choose between UPS and NPS from next financial year, here are key differences between the two schemes.
Also Read | 'UPS reflects govt's commitment to employees welfare and secure future,' says PM Guaranteed fixed pension amount
The people who have opted for the National Pension Scheme would be eligible for the Unified Pension Scheme (UPS) from the next financial year. The UPS provides an assured pension, which is 50% of the salary for those who joined the service after January 1, 2004.
However, NPS is a market-linked defined contribution scheme. Since the money from NPS is invested in the market, the pension amount is not fixed and is subject to fluctuation based on market conditions.
Also Read | NPS withdrawal rule to change soon: How this will benefit subscribers Contribution from employee
The NPS requires a 10-per cent contribution from the employee's basic salary, matched by a 14 per cent contribution from the government. In the case of the new Unified Pension Scheme, the government's contribution to the UPS will increase to 18.5% against 14% currently. Whereas, the employees will continue to contribute 10% of their basic pay and DA.
Also Read | National Pension Scheme (NPS) changes financially untenable: Finance Ministry NPS vs UPS eligibility
The UPS, announced by the Union Cabinet , will be available for all government employees, who joined the service after January 1, 2004.
“The Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension...50 per cent assured pension is the first pillar of the scheme,” ANI quoted Union Minister Ashwini Vaishnaw as saying on Saturday, August 24.
MENAFN24082024007365015876ID1108597196
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.