Govt staff seek return of old pension scheme as UPS opt-in period extended, plan protest, Pg2.

Key Highlights:

• Employee associations plan a protest at Jantar Mantar on November 9 to demand the restoration of the Old Pension Scheme (OPS).
• The Unified Pension Scheme (UPS), introduced this year, has seen low adoption, with only 4.5% (1.11 lakh) of 23.93 lakh employees opting in by September 30.
• The deadline to opt-in for UPS has been extended twice, now until November 30, due to slow adoption.
• OPS provides employees with 50% of their last drawn basic salary as pension, while NPS links pension amount to market performance.

Detailed Insights:

• The government introduced UPS to provide assured payouts while maintaining fiscal sustainability, offering an alternative to the market-linked National Pension System (NPS).
• Employee federations have requested that UPS benefits be applicable from the date of voluntary retirement, not just superannuation, to ensure parity for those taking Voluntary Retirement Scheme (VRS).
• The government moved away from OPS due to its unsustainable fiscal liability, leading to the introduction of NPS for employees joining on or after January 1, 2004.
• Despite the introduction of UPS, many central government employees still view the market-linked NPS as a better option.

Key Concepts Involved:

• Old Pension Scheme (OPS): A scheme where employees receive 50% of their last drawn salary as pension.
• National Pension System (NPS): A contribution-based pension system where the pension amount is linked to market performance.
• Unified Pension Scheme (UPS): A scheme guaranteeing 50% of the average basic pay drawn in the last 12 months prior to retirement as pension for employees completing 25 years of service.