Vikas Gawri's NPS vs UPS Guide for a Secure Retirement

One critical aspect to knowing your alternatives for retirement is that it is a must. Vikas Gawri, a financial expert, presented the Unified Income Scheme (UPS) as an alternative and discussed why it is better over the National Pension System (NPS) to the persons seeking a guaranteed pension. Let's learn the differences between NPS and UPS.

Since the NPS and UPS have their unique aspects, which one is better than the other is the question of the people's education. That is why let's compare them.

Employee Contribution

• Equal for Both: 10% of the basic salary + DA.

Employer Contribution

• NPS: 14% of the basic salary.
• UPS: 18.5% of the basic salary.

Pension Amount

• NPS: The pension is unsure because it is based on the returns of the market and the accumulated corpus.
• UPS: A hike of 50% will be given as per the standard calculation to the employees who have completed 25 years of service.

Minimum Pension

• NPS: The amount greatly depends on market performance.
• UPS: Rs. 10,000 per month for employees with at least 10 years of service.

Inflation Protection

• NPS: No inflation protection.
• UPS: The pension is adjusted based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).

Important features of the Unified Pension Scheme (UPS)

• Secure Pension: The last 12 monthly salaries will be taken into account if any employee has 25 years of service. If he/she gets 50% in return, it is to be assured under the terms and conditions.
• Family Pension: When the retiree passes away, the spouse will still receive 60% of the pension.
• Minimum Pension: Rs. 10,000 per month for those retiring with at least 10 years of service.
• Lump Sum Payment: On retirement, the lump sum will be deposited along with gratuity in the account of the retiring employees.

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If you're ready to accept risks in exchange for big rewards, the NPS may be right for you. However, if you desire a guaranteed pension, the UPS is a safer and more secure option.