Political War Over Pension Heats Up in Himachal: Modi’s Unified Pension Scheme Adds Fuel to the Fire..
Shimla: In a reform aimed at securing the financial future of government employees, the Central Government has announced the implementation of the Universal Pension Scheme (UPS), which will come into effect on April 1, 2025.
This comprehensive pension plan is set to benefit approximately 23 lakh Central Government employees, offering them enhanced retirement security and various options to choose from based on their preferences.
Under the UPS, retirees will receive a pension equivalent to 50% of their average basic pay over the last 12 months before retirement, provided they have a minimum qualifying service of 25 years.
Those with lesser service periods, down to a minimum of 10 years, will receive a proportionate pension.
This initiative is expected to provide a stable financial cushion for employees post-retirement, ensuring they can maintain their standard of living.
Significantly, the government has decided to increase its contribution towards the pension scheme from 14% to 18.5%, without requiring any additional contributions from the employees.
This increase underscores the government's commitment to the welfare of its workforce.
In a major relief for families, the UPS guarantees an Assured Family Pension, where the family of a deceased pensioner will receive 60% of the pension that the employee was entitled to.
Moreover, the scheme includes an Assured Minimum Pension of ₹10,000 per month for those who superannuate after at least 10 years of service.
To protect retirees against inflation, pensions under the UPS will be indexed to the All India Consumer Price Index for Industrial Workers (AICPI-IW), mirroring the dearness relief provided to serving employees.
Additionally, at the time of superannuation, employees will receive a lump-sum payment in addition to gratuity.
This payment will be calculated as 1/10th of the monthly emoluments (pay + DA) for every six months of completed service, without reducing the quantum of the assured pension.
The scheme also includes provisions for past retirees who were under the National Pension System (NPS), allowing them to switch to the UPS with arrears paid with interest at Public Provident Fund (PPF) rates.
This option will be available to both existing NPS/VRS employees and future employees, although the choice, once made, will be final.
The government has also designed the UPS architecture for adoption by State Governments.
If adopted at the state level, the scheme could potentially benefit over 90 lakh government employees who are currently under the NPS, significantly expanding the reach of this transformative pension reform.
This move by the Central Government marks a significant step towards ensuring financial stability and security for its employees, providing them with peace of mind as they approach retirement.
Meanwhile, Himachal Pradesh is already caught in a pension storm. The Sukhu-led state government, after winning the polls on the promise of the Old Pension Scheme (OPS), is now grappling with a financial crunch.
Employees are up in arms, demanding the release of arrears and dearness allowance (DA) worth a staggering ₹10,500 crore, dues lingering from the previous BJP government.
Amidst this financial chaos, Himachal’s BJP leaders are showering praises on the Modi government's UPS, further fanning the flames of the pension debate.
The big question now is: with this new scheme on the horizon, which pension plan will Himachal’s employees lean towards?
