The income of govt employees will increase by 19%...?

The central government has given a big gift to the government employees by approving the Unified Pension Scheme (UPS) in the Union cabinet meeting. The government has announced to bring a new pension system in place of Old Pension Scheme (OPS) and National Pension System (NPS). Under this, the existing pensioners are being given the option of Unified Pension Scheme (UPS) instead of NPS and OPS. Every government employee who started working after april 2004 can get the benefit of this new pension system.

What is Unified Pension Scheme?

The Modi government at the center has approved the Unified Pension Scheme on last saturday (24 August). This pension scheme of the central government has been named Unified Pension Scheme (UPS). The opposition was accusing the central government for a long time regarding the National Pension System and it was being said by the opposition leaders that the government is not giving the pension of their right to the government employees through the National Pension System.

Adoption of UPS can increase the salary of government employees by up to 19 percent

According to the central government, government employees who subscribe to UPS will benefit a lot from this new pension scheme. The direct reason for this is that the government's contribution to the pension fund in UPS will increase to 18.5 percent, which is currently at 14 percent. According to the news published in Times of india (ToI), UTI Pension Fund has conducted a survey for Times of India. According to this, there is going to be a direct benefit of 19 percent in the salary of government employees. However, there are some rules for this, such as the employee will be able to become its beneficiary only if his monthly salary is up to Rs 50,000.

The report shows that currently, employees can see an increase of 3 percent in their annual salary hike through this scheme. That is, it will increase to 8 percent CAGR i.e. Compound Annual Growth Rate. However, the UTI report does not include the employees' dearness allowance and pay commission awards. Therefore, according to the calculations done, the pension corpus or pension fund can be even more.