Centre unveils Unified Pension Scheme, which is almost comparable to the old Pension Scheme; it assures authorities personnel of 50% of their ultimate-drawn pay as a lifelong monthly advantage
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| New pension scheme |
The NDA authorities on Saturday (August 24, 2024) reversed a 21-yr-antique reform of India’s civil services pension gadget boldly brought in with the aid of the Atal Behari Vajpayee government, unveiling what it called a new ‘Unified Pension Scheme’ (UPS) this is actually similar to the old Pension Scheme, and assures government employees 50% in their last drawn pay as a lifelong monthly benefit.
The UPS, permitted by using the Union cupboard on Saturday (August 24, 2024), also assures officers a periodic dearness comfort hike in line with inflation tendencies, a family pension equal to 60% of a government worker’s pension within the case of their demise, and a lumpsum superannuation payout further to gratuity advantages on the time of retirement. Besides, a minimal pension of ₹10,000 a month has been promised for individuals who whole at least 10 years of primary authorities carrier.
The cabinet decision became knowledgeable by using guidelines of a committee beneath former Finance Secretary and cabinet Secretary-designate T.V. Somanathan, set up in March 2023 to review the countrywide Pension device (NPS) [originally known as the New Pension Scheme] for government personnel in a way that balances “their aspirations with economic Why is the government tweaking the national Pension machine?
At the time, five opposition-dominated States had moved their personnel out of the NPS to the vintage Pension Scheme (OPS) with assured pension at 50% of earnings. Under the NPS, which kicked in for employees becoming a member of government service on or after January 1, 2004, pension payouts had been related to the gathered value of contributions made by using government and the employee thru the latter’s working life. These contributions have been invested in equities and different marketplace-related securities with the aid of fund managers regulated via the Pension Fund Regulatory and development Authority (PFRDA).
State governments are open to undertake the architecture of the UPS, cleared by means of the cabinet to kick in from April 1, 2025, Mr. Somanathan stated after the cupboard’s clearance, stressing that the important thing difference between the OPS and the u.S.Is that OPS liabilities have been unfunded and entailed no contributions from personnel or the agency.
The UPS, will be a contributory scheme, with personnel’ chipping in 10% of income and the government bringing in 18.Five% of profits. Mr. Somanathan additionally signalled that personnel’ contributions will be frozen at the 10% threshold, whilst the government’s contributions may be adjusted higher or decrease based on periodic actuarial tests about the investment requirements to meet the united states of americapromises.
At the same time as the NPS will preserve to stay an option, all employees who have joined provider when you consider that 2004, which includes folks who may also have retired due to the fact then, were given the option to exchange over to the greater beneficiant UPS, and Mr. Somanathan reckoned it'll be useful for about 99% of NPS contributors to move to the UPS. One at a time, personnel have also been promised a lumpsum payment further to gratuity benefits at the time of retirement. This lumpsum could be equivalent to 1/10th of monthly emoluments (pay + Dearness Allowance) for each completed six months of carrier.
We're pleased with the tough work of all government personnel who make contributions notably to national progress. The Unified Pension Scheme guarantees dignity and financial safety for government personnel, aligning with our commitment to their properly-being and a comfy future,” high Minister Narendra Modi emphasised in a put up on X.
Whilst Mr. Modi had met government worker representatives in advance within the day, their reaction to the cupboard move was mixed.
The important Secretariat carrier discussion board was pleased that the authorities has realised “a actual want to ponder over NPS” and stated the u.S.Is better with an assured pension. However, the discussion board resolved to keep soliciting for its “one and simplest demand”, the OPS, indicating they were no longer in favour of salary deductions in the UPS.
Shiv Gopal Mishra, secretary of the Joint Consultative Mechanism (JCM) between the valuable government and its employees, informed The Hindu that they welcomed the UPS, including that the prime Minister had assured better coordination with employees in their hour-lengthy assembly within the evening.
His JCM colleague, All India Defence personnel Federation general secretary C Srikumar differed. “this is a end result of our agitations. But we aren't glad. The u.S.A.Should be non-contributory,” he stated, adding that they may look forward to the actual notification earlier than assessing the overall effect.
Data and Broadcasting Minister Ashwini Vaishnaw pointed out that Congress-dominated States that had introduced a go back to the OPS had been yet to enforce it, while the PM had ensured a nicely-consulted final results so that it will make certain “inter-generational fairness”
"Unified Pension Scheme (UPS) Launched: Government Assures 50% of Last Drawn Pay as Lifelong Monthly Benefit"
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