Retirement Planning: Unified Pension Scheme has been implemented for central employees from April 1. Under UPS, employees will be given a fixed pension. That is, this pension scheme will prove to be very beneficial especially for those employees who want a fixed income after retirement.

Central employees registered under NPS (National Pension System) will now have the option to choose one of the options from NPS or UPS. The National Pension System (NPS) was implemented in 2004. Let us know that after the implementation of the NPS scheme, this pension scheme was opposed on a large scale. The main reason for this was the link of this scheme to the stock market. In the year 2009, the government also opened this scheme for private sector employees. Now the central employees under this scheme will have an option to switch to UPS.

This means that now central employees will have to select one of the options NPS or UPS. To understand which option is better for retirement planning, the puzzle knows the special difference between the two. This means that now central employees will have to select either NPS or UPS. To understand which option is better for retirement planning, first let us know the main difference between the two.

Difference between UPS and NPS

The advantage of UPS is that under this, central employees will get fixed pension, which will be 50 percent of the average basic salary of 12 months before their retirement. At the same time, the pension amount in NPS depends on the returns from the market.

In both UPS and NPS, government employees will have to provide 10% of the salary. But the government has 14% contribution in NPS, while in UPS it will be 18.5%.

After completing 25 years of service under UPS, employees will get at least 50 percent fixed pension and lump sum of the last salary. Not only this, pension will also be increased according to inflation rate. While there are no advantages in NPS.

Benefits in NPS (NPS Benefits)

There is also a lot of benefits in the National Pension System (NPS), such as many tax benefits. By investing in divers assets like stock, government bonds and corporate dates, NPS can help subscribers to raise a large fund for retirement. Yes, it is definitely that NPS does not give any assurance of the already fixed pension amount after retirement, as it is an investment low pension plan, in which your contrast is invested in market linked instruments.

The NPS was introduced to promote retirement saving among employees. So to increase participation in this scheme, many tax benefits are available on NPS Contribution: Investing in NPS, there is a benefit of deduction under section 80C, which is a limit of Rs 1.5 lakh.