UPS: Since the arrival of UPS, you also have the same question in your mind, where will the pension get more? If you want guaranteed pension and want to stay away from market risk, UPS can be a good option. But if you are ready for more returns and understand the stock market, then NPS can prove to be better for you. Now the question is whether you should switch from NPS to UPS? Where you will get more pension.
The Central Government announced the Unified Pension Scheme (UPS) for employees on 24 August. This scheme is for employees who are currently part of the new pension system (NPS). This scheme will also include retired NPS subscribers. Employees had been demanding a pension scheme for a long time that could give them guaranteed income after retirement.
Would it be right to switch to UPS?
Experts believe that it depends entirely on the employee’s needs and the ability to take risk. If someone has experience in investing in the stock market and maintaining investment in prolonged retirement, then NPS can be a better option. Dhirendra Kumar, CEO of Value Research, says, “If an employee’s retirement is still 10-20 years left and he understands the market risk, the NPS can give him better returns.”
The biggest feature of UPS – guaranteed pension
The biggest feature of UPS is that it gives guaranteed income. The government has said that in UPS, the employee will get 50% of his last 12 months of basic salary at the time of retirement. This is beneficial for government employees who rely on fixed pension.
According to Suresh Sadgopan, CEO of Ladder 7 Wealth Planners, employees who want fix income can consider switching from NPS to UPS.
What is the difference between UPS and OPS?
The UPS is often connected to the Old Pension Scheme (OPS), but the two are different.
In OPS, it was the responsibility of the government to give pension to employees and employees did not contribute to it.
UPS is a funded scheme in which employees will contribute 10% of their salary and DA and the government will contribute 18.5%. 8.5% of the UPS will share the government’s share in the guarantee reserve fund, which will ensure guaranteed pension.
Can you go to NPS again?
The government has made it clear that once choosing UPS, the employee cannot return to NPS again. Therefore, it is necessary to take the decision thoughtfully. In the coming time, the government will share more information related to UPS, which will make it easier for employees to take decisions.