The Cabinet has approved the UPS, effective from April 1, 2025, which combines elements of the Old Pension Scheme and the New Pension System
Central government employees to get assured pension worth 50% of average basic pay in last 12 months of service. Both employee and govt to contribute
UPS aims to address uncertainties among govt employees by offering a defined benefit pension, reducing worries about pension fund performance
Govt contribution to increase from 14% to 18.5%, costing Rs 6,250 crore in first year. There will also be a one-time expenditure of Rs 800 crore for arrears
While UPS seeks to find a middle ground, reverting to the OPS could appeal to some states even if it imposes long-term economic costs
Shift to NPS was a significant reform. Any reversal, even partial, could undermine the long-term benefits and impose substantial costs on future generations