Few takers for UPS, employees plan Jantar Mantar protest to press for Old Pension Scheme

The Cabinet had approved the UPS in August 2024 and the Ministry of Finance rolled it out with effect from April 1 this year. Initially, employees under NPS had till June 30 to opt-in for UPS, but the deadline has been extended twice due to the slow pace of adoption, first till September 30 and then till November 30.

Under OPS, employees get 50% of their last drawn basic salary as pension. All those employed on or after January 1, 2004, are under the NPS — in which the pension amount is linked to the markets and the amount invested by the employee.

With employees continuing to demand a return to OPS, the government last year came up with the UPS, in which employees are guaranteed 50% of the average basic pay drawn in the last 12 months prior to retirement as pension for those completing 25 years of service. Employees under NPS have the option of switching over to UPS. However, many Central government employees, requesting anonymity, said the NPS, which is linked to the markets, was still a better option than the UPS.

In a representation submitted to the Department of Pensions and Pensioners Welfare on October 7, the federation demanded that the pension benefits under UPS be made applicable from the date of voluntary retirement, rather than the date of superannuation. “If an employee takes voluntary retirement at the age of 45 or 50, he or she will have to wait till the age of 60 years to get the pension. We have asked the government to reconsider this in order to bring parity for those taking VRS,” Patel said.

Patel and a delegation of the federation met Pensions and Pensioners Welfare Secretary V Srinivas on October 7 with their “suggestions” and “feedback” on the UPS, he said.
He added that the secretary would take their suggestions to the appropriate authority. The secretary did not comment when contacted.

On August 11, Union Finance Minister Nirmala Sitharaman had told Lok Sabha that there was no plan to restore the OPS.

“The government had moved away from OPS due to its unsustainable fiscal liability on the Government exchequer… With a view to improving upon the pensionary benefits for such employees, a Committee was constituted under the chairpersonship of the then Finance Secretary to suggest measures to modify the NPS. Based on the deliberations of the Committee with stakeholders, UPS has been introduced as an option under NPS with the objective of providing defined benefits after retirement to the Central Government employees covered under the NPS,” she had said.

Sitharaman said the UPS was designed in such a way that employees were given assured payouts, while the fiscal sustainability of the fund was also maintained.