Finance minister Nirmala Sitharaman on Tuesday said the Unified Pension Scheme (UPS) is an "improvement" on the National Pension Scheme ( NPS ) and expressed hope that all states would adopt it once they understand the merit of the new scheme. She rebuffed the impression that the UPS was a rollback to the Old Pension Scheme (OPS). The minister said the Goods and Services Tax (GST) Council could discuss the rate rationalisation at its next meeting but a final decision on any changes would be taken later.
"It (UPS) is not a rollback...
it is different from OPS and NPS (National Pension System). It is clearly a new package," Sitharaman said, adding that the new pension scheme is better and will satisfy most government employees . Speaking to select media persons, she said, "Government will not be burdened too much and employees will be satisfied because there is a guarantee element.
" The UPS, approved by the cabinet last Saturday, guarantees central government employees a monthly pension of 50% of their average basic pay over the last 12 months before superannuation for a minimum qualifying service of 25 years. The NPS, on the other hand, was a defined contribution scheme, under which employees would accumulate a retirement corpus. Sitharaman said pension will be proportionate for a lesser service period.
The scheme has been introduced to address the concerns of government employees over NPS, which came into effect from January 1, 2004. Unlike the Old Pension Scheme, UPS is cont.