With reference to the Unified Pension Scheme (UPS), consider the following statements: 1. It guarantees 50% of the average basic pay from the last 12 months before retirement as a pension for employees with at least 25 years of service. 2. Pension amounts will be indexed to inflation using the Consumer Price Index for Industrial Workers (CPI-IW) to maintain purchasing power. 3. It offers market-linked returns like National Pension System (NPS) and guaranteed pensions like Old Pension Scheme (OPS). Which of the statements given above are correct? |ForumIAS

Q. With reference to the Unified Pension Scheme (UPS), consider the following statements:
1.It guarantees 50% of the average basic pay from the last 12 months before retirement as a pension for employees with at least 25 years of service.
2.Pension amounts will be indexed to inflation using the Consumer Price Index for Industrial Workers (CPI-IW) to maintain purchasing power.
3.It offers market-linked returns like National Pension System (NPS) and guaranteed pensions like Old Pension Scheme (OPS).
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A

Notes:

Explanations –

Statements 1 and 2 are correct. Under the Unified Pension Scheme (UPS), employees with at least 25 years of service are guaranteed a pension equal to 50% of their average basic pay from the last 12 months before retirement. To ensure that pensions keep pace with inflation, the UPS links pension amounts to CPI-IW, providing periodic adjustments.

Statement 3 is incorrect. The Unified Pension Scheme (UPS) is contributory like the National Pension System (NPS) but provides defined benefits like the Old Pension Scheme (OPS).

Source: DD News

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