New Delhi [India]: Congress MP Manickam Tagore took a dig at Prime Minister Narendra Modi saying that his government launched the Unified Pension Scheme because he depended on allies to stay in power.
He said that the BJP’s earlier position was that the National Pension System (NPS) was a “revolutionary thing” and was good for state finances.
“We all know that the Congress party has been demanding the Old Pension Scheme to be revived. At that time, the BJP was saying that NPS has revolutionary things at the financial part of the state government and others. Now, they have done a U-turn. We know that PM Modi’s government has become weak. He has been reduced from 303 to 240 seats. He depends upon Chandrababu Naidu and Nitish Kumar. Therefore only he is doing this kind of U-turn,” Manickam Tagore told media on Monday.
On Saturday, the Union Cabinet approved the Unified Pension Scheme (UPS) for Central government employees, revising the 21-year-old NPS.
The UPS assures a lifelong pension of 50 per cent of the last drawn salary while under NPS pension was linked to the accumulated value of the contributions made by the employee and the government during the former’s working life.
While the Old Pension Scheme does not entail any contributions from the employee, the UPS requires the employees to contribute 10 per cent of their salary to the pension fund.
UPS is set to come into effect from April 1, 2025. Opposition parties have been advocating for the return of the Old Pension Scheme (OPS), which was replaced by the New Pension Scheme (NPS) in 2004.
The NPS is based on defined contributions by employees and employers, which are invested in selected funds, with the pension amount depending on the returns on those investments.
The government claims that the Unified Pension Scheme incorporates the advantages of the Old Pension Scheme and the features of the New Pension Scheme.
The UPS includes provisions for a fixed pension amount, guaranteeing a predetermined sum that retirees will receive regularly after retirement.
The UPS ensures that all central government employees who have served for 25 years or more will receive 50 per cent of their last drawn salary from the past 12 months as a pension.
Additionally, these employees will be eligible for post-retirement inflation-linked increments in their pension amount.