CITU DENOUNCES DECEPTIVE “UNIFIED PENSION SCHEME”DEMANDS UNCONDITIONAL RESTORATION OF OLD PENSION SCHEME
Centre of Indian Trade Unions (CITU) denounces the so called truncated Unified Pension Scheme (UPS) notified on 24-1-2025 by Department of Financial Services, Ministry of finance, Govt of India and demanded restoration of Old Pension Scheme.
As anticipated as per the Notification, UPS will be an option within the National Pension System effective from 1-4-2025. In spite of much orchestrated high-decibel campaign at the time of announcement of this so called “Unified Pension Scheme (UPS)” as Union Cabinet decision in August 2024, the reality is exposed as at the outset it will not be called pension but is termed as Assured Pay Out or Family Pay Out. It turned out to be utterly deceptive one on many counts.
It is funding-based-pension system relying on the regular and timely accumulation and investment of applicable employee and employer contributions. Employee contributes 10% of Pay +DA. Government contributes same 10%. Both will be invested in default investment scheme or as per employee’s option. Contributions and the reruns will be called as Individual Corpus(IC). Government will contribute additional 8.5% of Basic Pay +DA, which is investable as per the option of the Government. The contribution and the returns together are termed as Pool Corpus (PC).
To avail full benefit of the Scheme employee must authorise to transfer entire Individual Corpus to the Pool Corpus. If the employee had made partial withdrawal during the service he will have to make additional contribution to avail full benefit.
The initial announcement of August 2024 after Union Cabinet decision that the employee will have an option to withdraw up to 60% and get proportionately less pension has turned out to be another Jumla made by the Union Govt as same does not find mention in the final Notification dated 24-1-2025.
In case an employee partially withdraws or his contribution or employer contribution was not made for some period the Individual Corpus will be less. In such case PFRDA will compute a benchmark contribution taking in to account what would have been the employee’s Individual Corpus had he not withdrawn or had he or employer paid fully the contributions.That assumed amount will be called Bench Mark Contribution (BC).
The employee is eligible for the scheme if he has been superannuated or compulsorily retired as a penalty earlier, with effect from the scheduled date of superannuation or retirement. In case the employee wishes to voluntarily retire he can opt only after 25 years of qualifying service. But he is eligible for assured pay out only with effect from the date he would have superannuated. Employees removed,dismissed or resigned or not eligible for assured pay out, what happens to their individual corpus has not been spelt out.
One who has less than 10 years of Service is also not eligible for assured pay out. There is no mention about his individual corpus. The employee should have 25 years of qualifying service to get 50% of last 12 monthly average Basic Pay. Even if one has put up more service, only 25 years of service or 300 months will be taken into consideration for calculation. Assured Pay Out will be proportionately less for those below the qualifying service. If the individual corpus of an employee is less than the Bench Mark Corpus, the assured pay-out will be further reduced proportionately. Minimum pension on superannuation if employee transfers Benchmark Corpus will be Rs 10000. If the Individual Corpus is less than the Benchmark Corpus the minimum pension will be less than Rs 10000. Which means the minimum pension of Rs.10000 is also not guaranteed as claimed earlier while the scheme was announced.
Family Pay out will be 60% of assured pay out .The protection of minimum pay out of Rs 10000 is not applicable to family pay out. Dearness relief will be worked out in the same manner as dearness allowance applicable to serving employees. But the Notification does not clarify as to whether the same rates will be made applicable to Assured Pay Outs under UPS.
As the Assured Pay Out is available only if an employee authorises to transfer total individual corpus to Pool Corpus, a lumpsum of 10% of pay plus DA for every 6 months qualifying service is made. One who has less than 10 years of qualifying service is not eligible for the lump sum.
Retirees who retired in NPS are also eligible for UPS and will be paid arrears adjusting the withdrawals and annuities.PFRDA will decide the top up amount to be paid by such retirees. PFRDA will issue regulations to operationalise the scheme
As per the Notification 100% of individual corpus will be taken over by Government and Pension of 50% of the last month pay even for minimum of 10 years of service is not there. Assured Pay out will be proportionately reduced for lesser period of service and for lesser amount transfer to government. Minimum pay out guarantee of Rs 10000 is not applicable when bench mark corpus is not transferred to government and for family pay out Central Dearness relief is not certain. There is no commutation, no additional pension for 80 years and above, no revision of pension after Pay Commissions, Family pension is restricted to spouses.
So, under this so called Unified Pension Scheme of “Assured Pay Out”, nothing is “Assured” as propagated in August 2024, the 24th January 2025 notification invoked hundreds of “ifs and buts”, for squeezing and deceiving the employees further .
Hence the Notification has vindicated that the so claimed UPS is a model of deceptive exercise on the mass of the employees to deprive them of their legitimate and established right to pension by Modi Led Govt, true to its colour of not walking to its talk as done in the past 10 years. Hence CITU Denounces the UPS and demands unconditional restoration of Old Pension Scheme and shall continue to stand firmly with the employees’ ongoing struggles for nothing less than Old Pension Scheme.
TAPAN SEN, General Secretary, CITU
