Symbolic picture
The central government has made a big change regarding pension. The Finance Ministry will give central employees a chance to switch from UPS to NPS. This will benefit millions of employees who are thinking about choosing pension scheme from their minds. However, there are some terms and conditions for this, which let us know about.
The government has given the opportunity to go to NPS for employees adopting UPS pension. Which can switch only once and in one direction. Employees with UPS can switch to NPS until just one year before their retirement. Apart from this, those who are taking VRS, then they will have to choose this option till 3 months before that.
What will be the effect of switching
Employees who switch to NPS from UPS will not get a guaranteed pension of UPS. The additional 4% contribution of the government will be added to the NPS account. Also, after this, the employee will get money only under the rules of NPS. The rest, PFRDA (Exit & Withdrawal under NPS) Regulations 2015 will be applicable. The Finance Ministry has also directed all the departments to inform their employees about it, so that they can take the right decision according to their understanding and need.
Who will not be able to switch in NPS from UPS
Some guidelines have been issued by the Ministry for not all employees in NPS from UPS. Employees who have been dismissed, on which any kind of disciplinary action is going on, will not be able to do so. Also, the roads will be closed for those who do not switch within time. If not switching, employees will remain in UPS as default.
Why did this decision take?
The central government believes that this decision will make the pension system a little easier and flexible. The Finance Minister had recently told Parliament that 7,253 claims have been received under the UPS, out of which 4,978 claims have been settled and paid. Currently 25,756 retired central government employees are eligible for additional benefits of UPS.