UPS Vs NPS Vs OPS: Which of the Unified Pension Scheme, NPS and Old Pension Scheme is more beneficial? Understand here

UPS Vs NPS Vs OPS: For a long time, government employees were demanding amendment in NPS or re-implementation of the old pension scheme. The opposition was also making it an issue. The Modi government has now given a strong answer to this. The Union Cabinet headed by PM Modi approved a new pension scheme on Saturday. Its name is Unified Pension Scheme. In UPS, 50 percent of the average basic pay of 12 months before the retirement of the employee will be given as a pension. Also, there are many other benefits to this scheme. These include assured pension, assured family pension, assured minimum pension, indexation with inflation, and additional payment apart from gratuity. Let us know what is the difference between the Unified Pension Scheme, the New Pension Scheme, and the Old Pension Scheme now.

How is the Old Pension Scheme (OPS)?

• In OPS, half the amount of the employee’s salary is given as a pension at the time of retirement.
• There is a provision of General Provident Fund i.e. GPF in OPS.
• In OPS, the gratuity amount is up to Rs 20 lakh.
• Payment in OPS is made through the government treasury.
• In OPS, on the death of a retired employee, his family receives a pension amount.
• In OPS, no money is deducted from the employee’s salary for pension.
• There is a provision of DA being received after six months in OPS.

How is the New Pension Scheme (NPS)?

• In NPS, 10 percent of the employee’s basic salary + DA is deducted.
• NPS is based on the stock market. Therefore it is not completely safe. There is also a provision of tax here.
• To get a pension on retirement in NPS, 40% of the NPS fund has to be invested.
• There is no guarantee of a fixed pension after retirement in NPS.
• There is no provision for DA after six months in NPS.

How is the Unified Pension Scheme (UPS)?

• In UPS, the burden of pension does not fall on the employee. There is a provision for an assured pension in it.
• In UPS, 50 percent of the average basic pay of the employee for the 12 months before his retirement will be given as a pension. 
• In UPS, 60 percent of the pension that any employee was getting before his death will be given to the wife/husband of the deceased employee.
• For those with less service period, there is a provision of an assured minimum pension of Rs 10,000 per month in UPS.
• Inflation has been taken into account in UPS. On the same pattern as dearness allowance, inflation indexation will apply to assured pension, assured family pension, and assured minimum pension. 
• UPS has a provision for lump sum payment in addition to gratuity on retirement. For every 6 months of service, 1/10th of the monthly salary (pay + DA) will be given on the date of retirement.