As an important milestone for lakhs of central government employees, the government has formally set into motion the process of NPS-to-UPS transition starting today. The current move is part of a far-reaching reform aimed at enhancing pension security for government personnel and achieving parity between old pension scheme (OPS) and NPS.
What Is The Unified Pension Scheme (UPS)?
This new pension scheme has been set up to provide a more supportive and assured structure in pensioning terms. The main difference between NPS, which is linked to market activities, and UPS is that the latter guarantees a minimum pension amount post-retirement. Reports claim that a central government employee qualifying under the UPS may get a fixed monthly pension of up to ₹10,000.
Which Employees May Switch?
The transition from NPS to UPS shall currently apply to those central government employees who entered service after January 1, 2004, and were initially covered under NPS. The UPS would apply only to such employees who are eligible under set conditions. The notification released today specifies the eligibility conditions based on the years of service, current designation, and contribution history.
Important Terms And Conditions
- Opt-in Period: The application must reach the assessing authority within the time limit appearing most likely to expire by June 30, 2025.
- Minimum Service Limit: Only those members of the civil services with an active service of 10 years may be eligible for opt-in.
- Not Reversible: The decision to opt to be governed by the UPS will be final to the employee who opted for it.
- Fixed Pension Amount: UPS shall have a guarantee of a fixed pension amount paid out at retirement, unlike the NPS, which fluctuates with market conditions.
- Employer Contributions: Terms of contributions of the employer may change; the government would provide clarity on this within the next few weeks.
What Should Employees Do Now?
Central government employees are advised to contact the finance or HR wing of their department for information pertaining to eligibility criteria, and apply if they desire to exercise this scheme. An online portal is being established to provide timely and easy access to complete the switching process.
This has been one of the demands for employee unions and pensioner associations for decades. Now that the transition has set in, this change is expected to bring much greater security to lakhs of employees nearing their sunset years.
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