Big news for Pensioners. The Government of India has announced the Unified Pension Scheme just before Republic Day, and employee organizations are calling it a significant setback. Manjit Singh Patel, President of the National Mission for Old Pension Scheme India, remarked that the government has made a misstep ahead of the budget. Under the new scheme, Voluntary Retirement Scheme (VRS) will only be available after 25 years of service. Additionally, employees will have to wait until they reach 60 years of age to receive their pension. For instance, if someone retires at 45, they will face a 15-year wait for their pension.
Patel mentioned that employees who wish to revert to the old pension system can opt to be included in the Unified Pension Scheme. Choosing this option will guarantee them a pension. The National Pension System (NPS) will remain unchanged and continue as it has been.
The Unified Pension Scheme will apply only to those employees who have completed a minimum of 10 years of qualifying service. These employees will receive 50% of the average salary from their last 12 months as their pension, which will also include a dearness allowance. However, the employee contributions made under the NPS will be redirected to the government. In return for this contribution, the government will provide employees with a lump sum payment equivalent to one-tenth of their salary every six months.
Voluntary retirement kicks in after 25 years of service, but employees won’t see their pension until they hit superannuation. So, even after 25 years, they’ll have to wait until they’re 60 to start getting paid.
Here’s what the employees are asking for:
1. The government should lower the service requirement for pension eligibility to 20 years instead of 25, and allow voluntary retirement after 20 years, similar to NPS/OPS.
2. Pensions should start right after voluntary retirement, not just when they officially retire.
3. Instead of a one-time payout, employees should get their contributions back with interest.