Indian government introduces Unified Pension Scheme (UPS) for employees, starting April 2025, with assured post-retirement payouts. Compare OPS, NPS, and UPS differences.
The article from News18 discusses the key differences between three major retirement pension plans in India: the National Pension System (NPS), the Old Pension Scheme (OPS), and the Union Pension Scheme (UPS). NPS, introduced in 2004, is a market-linked, defined contribution plan where returns are not guaranteed, and the pension depends on the investment performance. It offers flexibility in investment choices and portability across jobs. Conversely, OPS, which was replaced by NPS for new government employees post-2004, provides a defined benefit where retirees receive a fixed percentage of their last drawn salary as pension, ensuring a predictable income post-retirement. The UPS, applicable to central government employees, also offers a defined benefit but with different terms regarding contributions and benefits. The article highlights that while OPS and UPS provide security and predictability, NPS offers potential for higher returns with associated market risks, and emphasizes the importance of understanding these schemes for effective retirement planning.
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