UPS: A step forward or a step backward for govt employees?

The Unified Pension Scheme (UPS) represents a sustainable and fiscally prudent approach to social security. The transition from the National Pension System (NPS) to the UPS ensures beneficiaries receive an assured pension with inflation indexation, coupled with a lump-sum payment.

“While the rising life expectancy poses challenges in providing a guaranteed pension, this scheme has effectively merged the best elements of both the Old Pension Scheme (OPS) and NPS. The balance struck between enhanced benefits and fiscal responsibility makes UPS a promising model for state governments and other public sector organizations”, said Gopal Kumar, Actuary with Radgo & Company.

However, AITUC has opposed UPS, rather it that the pension for govt staff should be made fully contributory by the govt. Also, it has called upon the Govt staff to carry forward their movement for achieving their Pension Rights.

Amarjeet Kaur General Secretary, AITUC said, “We are opposing UPS (Unified Pension Scheme) as it is only partially contributory, whereas we want it to be made fully contributory by the govt.”

Moreover, the fact remains that the Central government employees and State government employees by and large are not happy with the new UPS, since it is nothing but an extension of NPS, she said.

One of the worst decision is the full pension period is increased to 25 years which is at present 10 years under the old pension scheme. Minimum pension is declared as Rs 10,000 whereas the minimum family pension is decreased to Rs 6,000. There are many protections for the pensioners in the OPS, such as 40 per cent commutation of pension in advance, restoration of the commuted portion of pension after 15 years, 20 per cent addition pension after 80 years of age and their after the pension is increased in every five years, she said.

Changing of name of places and schemes is the character of the present government without any benefit to the people or the nation, which is reflected once again yesterday when the Narendra Modi Cabinet took a decision to retain the NPS in its present shape and to introduce one more contributory pension scheme in the name of UPS, AITUC said in a statement.

The government employees for the past 20 years are relentlessly fighting against the market based contributory pension scheme called NPS. Due to the pressure built up by the central government employees through their united struggles the government appointed a high level committee chaired by the then Finance Secretary TV Somanathan for making recommendations for improvement in the NPS. The government employees organisation have been categorical to the NPS improvement committee that no improvement in the NPS is going to match with the non-contributory defined and guarantee old pension scheme with many protections and supplementary family pension and hence the same should be restored back.

The TV Somanathan Committee worked under its mandate and submitted its recommendations not to restore the old pension scheme but to introduce another contributory pension scheme which was never the demand of government employees. On August 24, the Cabinet considered the recommendations of the TV Somanathan Committee and came out with a big announcement with lot of unfair that government has taken care of the interest of more than 25 lakhs central government employees.

Pension and family pension are revised after pay commission in old pension scheme, whereas no such provision is there in the UPS. The market gambling in the UPS will continue to remain. Already more than 6 lakhs crores is accumulated with the NPS fund. The Modi government wanted to retain this amount in the market. If the Modi government is really concerned about the old age protection of the government employees, It should have increased its contribution to 28.5 per cent, 18.5 per cent government contribution in UPS now announced over10 per cent of the employees contribution and straight away restored the OPS instead of the gimmicks of introducing another contributory pension scheme UPS. In a nut shell UPS is not going to match the OPS which is basically non-contributory in nature.