NPS vs UPS: The central government has announced the Unified Pension Scheme (UPS) for employees on August 24. This scheme is for those employees who are currently part of the New Pension System (NPS). This scheme will also include retired NPS subscribers.
NPS vs UPS: Since the arrival of UPS, the same question is in your mind that where will you get more pension? If you want guaranteed pension and want to stay away from market risk, then UPS can be a good option. But if you are ready for higher returns and understand the stock market, then NPS can prove to be better for you. Now the question is, should you switch from NPS to UPS? Where will you get more pension.
The central government announced the Unified Pension Scheme (UPS) for employees on August 24. This scheme is for those employees who are currently a part of the New Pension System (NPS). This scheme will also include retired NPS subscribers. Employees have been demanding a pension scheme for a long time, which can give them guaranteed income after retirement.
Would it be a good idea to switch to UPS?
Experts believe that it completely depends on the needs and risk-taking ability of the employee. If someone has experience of investing in the stock market and maintaining the investment for a long time in retirement, then NPS can be a better option. Dhirendra Kumar, CEO of Value Research, says, if an employee has 10-20 years left for retirement and he understands the market risk, then NPS can give him better returns.
The biggest feature of UPS – Guaranteed Pension
The biggest feature of UPS is that it gives guaranteed income. The government has said that at the time of retirement, the employee in UPS will get 50% of his average basic salary of the last 12 months as pension. This is beneficial for those government employees who rely on a fixed pension.
According to Suresh Sadagopan, CEO, Ladder7Wealth Planners, employees who want fixed income can consider switching from NPS to UPS.
What is the difference between UPS and OPS?
UPS is often linked with the Old Pension Scheme (OPS), but the two are different.
In OPS, the entire responsibility of giving pension to the employees was of the government and the employees did not contribute to it.
UPS is a funded scheme in which employees will contribute 10% of their salary and DA and the government will contribute 18.5%. Out of UPS, the government’s share of 8.5% will go to the Guarantee Reserve Fund, which will ensure guaranteed pension.
Can I go to NPS again?
The government has clarified that once an employee chooses UPS, he cannot go back to NPS. Therefore, it is important to take a decision thoughtfully. In the coming time, the government will share more information related to UPS, which will make it easier for employees to take decisions.
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