Opinion
Mint Quick Edit | So, will UPS sign up private sector folks too?
Summary
- The Unified Pension Scheme has clearly pleased central government employees with its largesse. If its budgetary burden in the future is projected to be as low as claimed, should it not be open to everyone?
Over 2.3 million central government employees are expected to be delighted by the recently announced Unified Pension Scheme (UPS), which, for 25 years of service or more, offers an assured pension of half an employee’s average basic pay over the last 12 months before retirement.
“The UPS is an attempt to improve the existing National Pension System (NPS)," in the words of finance minister Nirmala Sitharaman. True. It’s a better deal than what existed, though not a reversal to the fiscally hazardous old pension scheme (OPS). But what about private-sector NPS subscribers?
If the future budgetary burden of the UPS is expected to be low, as claimed, since it’s a funded scheme, should it not be open to everyone? Not inviting others to join would suggest it’s closer to the OPS than it’s being portrayed as.
Also read: Unified Pension Scheme: Is good psychology also sound economics?
The joker in the pack is India’s stock market performance, which will determine not just the UPS corpus, but the retirement plans of many non-government employees.
Equity gains have been sharp, lately, but should they plateau, as they plausibly could, the latter would clamour for better old-age support too. And they happen to be the vast majority of Indian workers—and voters.
