Retirement planning is a very important financial decision. The right planning can make many future problems easier. Everyone plans for a pension during their job. Government employees are also included in this. Currently, new government employees in India get a pension under NPS i.e. National Pension Scheme.
At the same time, central employees recruited before 22 December 2003 get pensions under OPS i.e. Old Pension Scheme. After April 1, 2025, employees in the country can also take a pension under the Integrated Pension Scheme i.e. UPS if they want. Let us know what is the difference between the three pension schemes and which scheme gives the most benefit. Do you also want to know which pension scheme is best for you? So let’s know.
What is the main difference between the NPS, UPS, and OPS
Integrated Pension Scheme will come into effect from April 1, 2025 this year. Under UPS, the central employees will be given the fixed pension. It will be 50% of their average basic salary of the last 12 months. Employees have to serve at least 25 years to get this pension. If the employee dies, his family will get 60% of the employee’s pension.
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Apart from this, those who work for 10 years will also get a pension of at least Rs 10,000. The pension of the retired employees will keep increasing according to the inflation. Under this pension scheme, the government will contribute 18.4 percent. While employees have to contribute 10% of the basic salary and dearness allowance. Pension under UPS will be given based on this contribution.
If we talk about the NPS scheme, then anyone from private to government employees can avail of it. 10 percent of the salary is deducted in NPS. NPS is a stock market linked scheme. On contributing to it, 60% of the amount is received as a lump sum at the time of retirement and the remaining 40% is given as annuity.
If we talk about OPS, then a guaranteed pension is given in OPS based on the last basic salary of the central employee and the number of years of service. Employees who have worked for at least 10 years are eligible to take OPS. In this, dearness allowance is increased twice a year.
Employees do not have to make any contribution to it. GPF facility is also available in it. However, let us tell you that only employees recruited before 22 December 2003 can avail this.
Which scheme is more beneficial
If a government employee is eligible to take pension under the old pension scheme i.e. OPS. So the best for him is OPS. Because it has more benefits. There is no guaranteed pension in it, but returns are given based on investment.
If we talk about UPS, then contribution is also made by the government in it. That is, the second best pension plan after OPS is UPS. Employees can choose any pension plan by calculating it based on their requirements.
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