The central government has introduced an important and flexible option for central employees regarding pension.
The Finance Ministry has now decided to give the option of shifting to the New Pension Scheme (NPS) to the employees who have adopted the Old Pension Scheme (UPS). This decision can prove to be a relief for those employees who are looking for a practical and transparent retirement option for the future.
This opportunity will be available only once.
It has been clarified by the government that employees can switch from UPS to NPS only once, and this decision will be valid in one direction only. Employees who are planning to take voluntary retirement (VRS) will have to choose this option at least 3 months before retirement, while employees taking normal retirement can switch up to one year before retirement.
What will change with the switch?
Employees who leave UPS and join NPS will no longer get the facility of guaranteed pension. Instead, the central government will contribute an additional 4% to their NPS account. The amount they will get under NPS after retirement will be given as per the exit and withdrawal rules of PFRDA 2015.
Who will not be able to switch?
The following employees will not be able to avail this facility:
- -Those who are facing disciplinary action
- -Those who have been dismissed-Those who do not opt ​​for the switch within the stipulated time frame
- -Employees who do not switch will automatically be considered under UPS, and will not get any chance to switch in future.
The government believes that this initiative can make the pension system simpler, transparent and with more options. According to the Finance Minister, so far 7,253 pension-related UPS claims have been received, out of which 4,978 claims have also been paid. At present, about 25,756 retired employees are eligible to get additional benefits under UPS.
