Unified Pension Scheme (UPS) : In News
Central government employees have until September 30 to opt for the new Unified Pension Scheme (UPS)
- The UPS, introduced as an optional switch for employees hired before January 1, 2004, assures a pension of 50% of the average basic pay of the last 12 months.
- It requires contributions of 10% of basic pay plus DA from employees and 14% from the government.
- However, interest is low because under the Old Pension Scheme (OPS), employees contribute nothing yet receive the same 50% pension on last drawn basic pay.
- Many employee groups argue the UPS and market-linked NPS are less beneficial and continue to demand a return to OPS.
Unified Pension Scheme (UPS):
- Introduced by the Government of India in 2025 as an optional scheme for central government employees.
- For employees hired before January 1, 2004, who are currently under the Old Pension Scheme (OPS).
- Nature: A one-time, optional switch—not mandatory.
- Key Features:
- Assured Pension: 50% of the average basic pay of the last 12 months of service.
- Contribution: Employee – 10% of basic pay + Dearness Allowance (DA); Government – 14%.
- Comparison with OPS:
- OPS: No employee contribution; pension = 50% of last drawn basic pay.UPS: Employee contributes 10%, but pension formula is nearly the same.
