Big change in pension system from today, you will be able to choose either UPS or NPS, know which is better

New Delhi: The month of April has started and with it a big change is going to happen in the pension system as well. Yes, the Pension Fund Regulatory and Development Authority had notified UPS in the month of March and issued a notification regarding its implementation from April 1, 2025. This scheme is especially beneficial for those employees who want a fixed income after retirement. UPS will be applicable for those central employees who are already registered under NPS. They will now have the option to choose either NPS or UPS. Let us know how to get its benefits and which option is better?

UPS was announced in January
The government had officially announced the Unified Pension Scheme as an option of the National Pension System on January 24 and now announced the implementation of this scheme from April 1, 2025. Central employees covered under NPS will get the benefit of this new scheme. That is, central employees who come under the National Pension Scheme and choose the option of UPS under it, will be able to take advantage of it. People choosing UPS will not be entitled to any other policy concession, policy change, financial benefit.

Understand UPS easily
Now let us tell you what is UPS? So under the Unified Pension Scheme, now central employees will be given a fixed pension, which will be 50% of the average basic salary of the last 12 months before the retirement of the employee. To get this pension, the employee will have to serve for at least 25 years. If the employee dies, the family will also continue to get a fixed pension, which will be 60 percent of the pension he receives. Apart from this, minimum assured pension will also be given, which means that those who work for 10 years will get a pension of at least Rs 10,000.

How much will be the government contribution?
In the New Pension Scheme, the employee has to contribute 10 percent of his basic salary and the government contribution in this is 14 percent. At the same time, in the UPS, which is going to be implemented from April 1, 2025, this contribution of the government will be 18.5 percent of the basic salary of the employee. With the implementation of this unified pension scheme, about 23 lakh employees are going to benefit and the additional burden on the government treasury will be Rs 6250 crore in the first year.

Pension will increase on the basis of inflation
Indexation has also been added under the Unified Pension Scheme. This means that the pension of retired employees will keep increasing according to inflation. This increase will be added to the pension as inflation relief. It will be calculated on the basis of All India Consumer Price Index for Industrial Workers. A lump sum amount will also be given on retirement.

What is National Pension Scheme?
Let us tell you that after closing the Old Pension Scheme, the government started the National Pension Scheme for all government employees in 2004. The account in NPS is portable, that is, it can be operated from anywhere in the country. The government also opened it for private sector employees in 2009. Now the central employees coming under this scheme have also been given the facility to switch to UPS.

This is the big difference between UPS and NPS

• Under UPS, central employees will get a fixed pension, which will be half of their average basic salary of 12 months before retirement. At the same time, the pension amount in NPS depended on the market returns, due to which it keeps fluctuating.
• In both UPS and NPS, government employees will have to contribute 10 percent of the salary. But if we talk about government contribution, the contribution in NPS was 14 percent, whereas in UPS it will be 18.5 percent.
• Under UPS, employees will get fixed pension and lump sum amount after 25 years of service. The pension will also increase according to the inflation rate. Whereas there is no fixed pension in NPS.