NPS vs UPS for Retirement Pension: Recently, UPS was introduced as an option in NPS. Now in UPS, employees will get benefits like fixed pension, lump sum amount and gratuity after retirement. Its most important benefit is a monthly pension. Suppose someone has worked for 25 years, then after retirement, the employee will be given 50 per cent of the average basic salary of the last 12 months every month. Now employees will have a lot of ease after retirement.
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Let us tell you that the Unified Pension Scheme (UPS) was launched by the government. The time of 30 September 2025 has also been given to join this scheme. The government has made many changes under the scheme. At the same time, employees are not choosing the UPS option that fast.
On the other hand, if an employee does not choose the UPS option, then the government will assume that the employee has chosen the NPS option. National Pension System (NPS) is a kind of optional retirement scheme, which is overseen by the Pension Fund Regulatory and Development Authority (PFRDA).
Employees who choose UPS will get benefits like fixed pension, lump sum amount and gratuity after retirement. This scheme is considered very good for those who do not want to be financially troubled after retirement.
Central employees coming under NPS can choose UPS as an option under the National Pension System. The contribution to NPS is invested by dividing it into debt and equity according to the age of the employee and the scheme chosen. However, the return on investment is not fixed but linked to the market.
After working for 25 years at UPS, employees will be given 50 per cent of their last salary as a fixed pension and a lump sum amount. A fixed pension is not available under NPS. UPS also provides the benefit of DR. That is, if there is inflation, the pension will increase accordingly.