UPS not U-turn or rollback, it’s a new package, says Sitharaman

The Finance Minister said the Unified Pension Scheme (UPS) is better and will benefit most government employees, adding that it is designed in such a manner that every calculation fits and even the government is not burdened too much, she said.

“We had to come up with something to improve NPS…in order to see what was hurting people,” she said, adding that most of the states are expected to adopt UPS “as it has a lot of benefits for employees”.

On Sunday, Congress President Mallikarjun Kharge had listed out the decisions regarding Long Term Capital Gain Tax and indexation, sending Waqf Bill to Joint Parliamentary Committee, Broadcast Bill and lateral entry as rollbacks by the government.

“The ‘U’ in UPS stands for Modi Govt’s U turns! Post June 4, the power of the people has prevailed over the arrogance of power of the Prime Minister,” he had posted on X.

Sitharaman said “these days Congress makes comments without doing comprehensive study, which was not the case earlier. They have just become a nara-driven or sloganeering-driven party.”

Defending recent decisions like restoration of indexation benefits for LTCG, she said it was not a rollback but tweaking of the Budget announcement after understanding the feedback received from the middle class and responding to it.

On the UPS for 23-lakh Central government employees, she said it will be available for those who are current subscribers of the NPS.

The new Unified Pension Scheme guarantees employees 50 per cent of their average basic pay over the last 12 months before retirement as a pension for a minimum qualifying service of 25 years against a market-returns linked payout under the NPS.

The assured pension will be based on the ‘default mode’ of investment pattern notified by the pension regulator and considering full annuitisation of individual pension corpus. In case, the benchmark annuity is lower than the assured annuity, the shortfall will be made good. In case the individual employee corpus generates higher than assured annuity (based on investment choice exercised by the employee), the employee will be entitled to such higher annuity. In case however, the annuity generated is lower than the default mode, the top up provided by the government through UPS will be limited to the benchmark annuity.

The pension will be proportionate for a lesser service period of up to a minimum of 10 years. Also, assured pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service.