
The Punjab government has decided to examine the recently introduced Unified Pension Scheme (UPS) to determine its feasibility for state employees who joined after January 1, 2004. This decision comes amid growing pressure from employees demanding a return to the Old Pension Scheme (OPS), as promised by the ruling Aam Aadmi Party (AAP) before the 2022 state elections.
High-Level Committee to Study UPS
A senior Punjab government official confirmed that a high-level committee, originally set up to draft the Standard Operating Procedure (SOP) for OPS implementation, will now study the UPS. The committee will analyze the scheme’s benefits, financial implications, and suitability for state employees before finalizing its recommendations.
What is the Unified Pension Scheme?
The Unified Pension Scheme (UPS), introduced by the central government and set to take effect from April 1, 2025, aims to provide an assured pension for government employees. Key features of the scheme include:
- A minimum monthly pension of ₹10,000 for employees retiring after at least 10 years of service.
- A full pension of 50% of the average basic pay (calculated over the last 12 months) for those with 25 years of service.
- Proportionate pension benefits for employees with less than 25 years of service.
- Dearness relief (DR) on the pension amount, including family pensions.
- Government’s contribution increased to 18.5% (from 14% under the National Pension Scheme (NPS)), while employees will continue contributing 10%.
The central government notified the scheme on January 24, following approval from the Union Cabinet in August 2024.
Employees Still Demand OPS
Despite the introduction of UPS, Punjab’s two lakh government employees who joined after 2004 remain firm on their demand for the restoration of OPS. They argue that both NPS and UPS are contributory schemes linked to market returns, unlike OPS, which guarantees a fixed pension.
Employee union leader Sukhchain Singh Khehra stated, “UPS, like NPS, requires employees to contribute 10%. This is not acceptable. The government should fulfill its promise and restore OPS without further delay.”
Political Commitment vs. Reality
In November 2022, the AAP government issued a notification to implement OPS in Punjab. However, the plan has not been executed yet, causing frustration among employees. The government’s latest move to evaluate UPS suggests a possible shift in its pension policy.
The final decision will depend on the committee’s findings and the government’s assessment of the financial burden.