The NDA authorities reversed a 21-year-old reform of India’s civil providers pension system boldly introduced in by the Atal Bihari Vajpayee authorities, unveiling what it referred to as a brand new ‘Unified Pension Scheme’ (UPS).
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The NDA authorities on Saturday (August 24, 2024) reversed a 21-year-old reform of India’s civil providers pension system boldly introduced in by the Atal Bihari Vajpayee authorities, unveiling what it referred to as a brand new ‘Unified Pension Scheme’ (UPS) that’s nearly akin to the Old Pension Scheme, and assures authorities workers 50% of their final drawn pay as a lifelong month-to-month profit.
The UPS, approved by the Union Cabinet on Saturday (August 24, 2024), additionally assures officers a periodic dearness aid hike consistent with inflation tendencies, a household pension equal to 60% of a authorities employee’s pension within the case of their demise, and a lumpsum superannuation payout along with gratuity advantages on the time of retirement. In addition to, a minimal pension of ₹10,000 a month has been promised for many who full not less than 10 years of central authorities service.
The Cupboard resolution was knowledgeable by suggestions of a committee beneath former Finance Secretary and Cupboard Secretary-designate T.V. Somanathan, arrange in March 2023 to evaluate the Nationwide Pension System (NPS) [originally known as the New Pension Scheme] for presidency workers in a manner that balances “their aspirations with fiscal prudence”.
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On the time, 5 Opposition-ruled States had moved their workers out of the NPS to the Previous Pension Scheme (OPS) with assured pension at 50% of wage. Below the NPS, which kicked in for workers becoming a member of authorities service on or after January 1, 2004, pension payouts have been linked to the collected worth of contributions made by authorities and the worker by way of the latter’s working life. These contributions have been invested in equities and different market-linked securities by fund managers regulated by the Pension Fund Regulatory and Growth Authority (PFRDA).
State governments are open to undertake the structure of the UPS, cleared by the Cupboard to kick in from April 1, 2025, Mr. Somanathan mentioned after the Cupboard’s clearance, stressing that the important thing distinction between the OPS and the UPS is that OPS liabilities have been unfunded and entailed no contributions from workers or the employer.
The UPS, shall be a contributory scheme, with workers’ chipping in 10% of wage and the federal government bringing in 18.5% of wage. Mr. Somanathan additionally signalled that workers’ contributions shall be frozen on the 10% threshold, whereas the federal government’s contributions could also be adjusted greater or decrease primarily based on periodic actuarial assessments in regards to the funding necessities to satisfy the UPS guarantees.
Whereas the NPS will proceed to stay an possibility, all workers who’ve joined service since 2004, together with those that might have retired since then, have been given the choice to change over to the extra beneficiant UPS, and Mr. Somanathan reckoned will probably be helpful for about 99% of NPS members to maneuver to the UPS. Individually, workers have additionally been promised a lumpsum cost along with gratuity advantages on the time of retirement. This lumpsum shall be equal to 1/tenth of month-to-month emoluments (pay + Dearness Allowance) for each accomplished six months of service.
“We’re happy with the exhausting work of all authorities workers who contribute considerably to nationwide progress. The Unified Pension Scheme ensures dignity and monetary safety for presidency workers, aligning with our dedication to their well-being and a safe future,” Prime Minister Narendra Modi emphasised in a put up on X.
Whereas Mr. Modi had met authorities worker representatives earlier within the day, their response to the Cupboard transfer was blended.
The Central Secretariat Service Discussion board was happy that the Authorities has realised “a real have to ponder over NPS” and mentioned the UPS is healthier with an assured pension. Nevertheless, the discussion board resolved to proceed asking for its “one and solely demand”, the OPS, indicating they weren’t in favour of wage deductions within the UPS.
Shiv Gopal Mishra, secretary of the Joint Consultative Mechanism (JCM) between the central authorities and its workers, instructed The Hindu that they welcomed the UPS, including that the Prime Minister had assured higher coordination with workers of their hour-long assembly within the night. .
His JCM colleague, All India Defence Workers Federation basic secretary C Srikumar differed. “It is a results of our agitations. However we’re not pleased. The UPS must be non-contributory,” he mentioned, including that they’ll await the precise notification earlier than assessing the total impression.
Info and Broadcasting Minister Ashwini Vaishnaw identified that Congress-ruled States that had introduced a return to the OPS have been but to implement it, whereas the PM had ensured a well-consulted consequence that may guarantee “inter-generational fairness”.
