UPS vs. NPS vs. OPS: Debate on the pros and cons of government employee pension plans

Opinions on this issue seem to be divided, as there are indications that the state government will implement the UPS in the same form as the Union government may do.

Although many of them consider UPS to be somewhat better than NPS, they continue to support the call for the implementation of OPS, which was in force until 2004. In addition to the possibility of employee participation, UPS lacks the possibility of revision, as was the case with OPS.

“The social security aspect is still missing at UPS. Newcomers to the public sector know the pros and cons and are not enthusiastic about UPS,” said Arjun Dev Bharti, chairman of the Sachivalaya Sangh of Uttar Pradesh, over the phone. He said UPS is still tied to the market, which is not in the interest of the workers.

Others are waiting for the Union government’s notification on the UPS. They say the demand for OPS will continue even if the state government goes ahead with the implementation of the UPS in the coming months. While various aspects of the Unified Pension Scheme (slated to be implemented from April 1, 2025) are public knowledge, there seems to be no clarity on the eligibility criteria, whether the UPS will cover all those covered under the NPS or only those joining service after April 1, 2025.

“UPS is being discussed in almost all government offices. We receive 20 to 25 calls every day from different districts wanting to know more about UPS. We are in favour of OPS as the contribution factor in UPS is turning out to be a major disadvantage,” said JN Tiwari, president of Uttar Pradesh State Joint Employees Council.

“Employees contribute 10 per cent of their salary to their pension, as in the NPS, while the government contributes 18.5 per cent. This shift distributes financial responsibility and is a departure from the non-contributory model of the OPS,” he said.

Hari Kishor Tiwari, chairman of another faction of the Uttar Pradesh Joint Council of Workers, expressed the same view.

“About 80 percent of our requests have been addressed by UPS. We will address further requests as soon as the Union government issues a notification,” said Hari Kishor Tiwari.

Shailendra Dubey, chairman of the All India Power Engineers’ Federation, said the OPS provides for a severance payment of 40 per cent of the pension amount soon after retirement and after 15 years, full pension will be given to employees again. He said the pension amount under the OPS will be increased by 20 per cent when the pensioner attains the age of 80, 30 per cent at 85, 50 per cent at 90 and 100 per cent at 95.

“Also, the OPS will be revised with the implementation of the Pay Commission reports. The UPS is in no way an alternative to the OPS,” Dubey said, adding that all power sector employees should also be covered under the OPS.

KEY CONCERNS

– Like NPS, UPS requires contributions from employees. This is not the case with OPS.

– UPS appears to lack provisions for adjustment of pension amount (increase), as is the case with OPS.

-There is confusion about the migration from NPS to UPS or who will benefit from UPS. Worker representatives are still in favor of OPS.