Context
In a recent development of the central govt. in relation to the govt. Servants regarding their post retirement pension scheme, the latest decision of the Union Cabinet presided over by Prime Minister Shri Narendra Modi has given its nod for going with the change with the announcement of the Unified Pension Scheme (UPS) which aims at providing a holistic and single pension related solution for each and every government servant.
Key Features
- Assured pension: half of the total of the current basic pay for the last one year, before the superannuation, provided that the applicant has served for at least twenty five years.
- Partially proportionate pensions which also applies for the periods of service below 10 years
- Assured family pension: Contributory: An amount equal to sixty percent of the pension of the employee immediately before his death.
- Assured minimum pension: A Superannuation of rupees one thousand only per month after serving minimum 10 years of services.
- Inflation indexation: Dearness Relief linked with AICPI-IW of the previous July
- Lump sum payment at superannuation: Pay + DA shall be 1/10th for every completed six months period of service.
Benefits
- Reduces the several functions involved in pension management and administration.
- Helps to get tangible, reliable and continuous Retirement income
- Fosters the accumulation of funds for long-term spending and savings and expansion of capital outlay.
- Protects financial status and their dignity for seniors
- Through this approach, social security benefits are inflation-indexed in order to guarantee that a beneficiary’s purchasing power is preserved.
Challenges
- Linking current pension and pension data schemes
- That there is sufficient funding and that investment returns are good.
- A proper measures’ solution to different contribution rates and benefit structures
- It is the sweet spot between freedom for individuals and manageability for a collection of people.
- Creating a awareness and trust among the government servants
Implementation Strategy
- This is a very general title for a scheme and a number of schemes could easily be rolled into this category that can be phased out gradually over time to reduce the burden on government’s policy costs.
- Recruiting of new members on a gradual basis
- Building up an effective Information Technology framework
- Awareness creation and promotion of avian influenza and its control
- It can also be seen that in order to maximise the efficiency of the scheme, it may be necessary from time to time to review the set parameters and possibly modify them accordingly.
Conclusion
- The Unified Pension Scheme holds the capability to revolutionise India’s retirement scenario as it offers the basic need of a pension plan to all citizens that is safe, sustainable and efficient.
- Implementation procedures should be well-organised since it is a complex process that requires cooperation of different actors.
Source: pmindia.gov.in