Why in the News?

The Centre has approved the Unified Pension Scheme, starting Apr 2025, with NPS employees allowed to switch till Sept 30, 2025.

About Unified Pension Scheme (UPS):

Launch & Applicability: Announced in August 2024; implemented from 1 April 2025. Applicable to central govt employees who joined service after 1 January 2004 (those under NPS).
Nature: Hybrid pension system combining features of the assured benefit of OPS and the contributory model of NPS.
Assured Pension: 50% of the average basic pay drawn in the last 12 months before retirement, with minimum 25 years of service.
Minimum Pension: ₹10,000/month assured after 10 years of service.
Family Pension: 60% of pension last drawn, payable to spouse on retiree’s death.
Contributions: Employee contributes 10% of basic pay + Dearness Allowances (DA); govt contributes 10% + an additional 8.5% towards a pooled corpus.
Lump Sum at Retirement: 1/10th of last pay + DA for every completed six months of service, in addition to gratuity.
Inflation Indexation: DA-linked relief on pensions, tied to CPI-IW.
Flexibility: Employees may choose between NPS and UPS, but once shifted, re-entry into UPS is not allowed.

	Old Pension Scheme (OPS)	National Pension System (NPS)	Unified Pension Scheme (UPS)
Type	Defined Benefit	Defined Contribution (market-linked)	Hybrid (Defined + Contribution)
Employee Contribution	None	10% of Basic + DA	10% of Basic + DA
Govt Contribution	Entire burden on govt	14% of Basic + DA	10% + 8.5% pooled corpus
Assured Pension	50% of last drawn pay + DA	None; depends on market returns	50% of avg. basic pay (last 12 months)
Minimum Pension	Not fixed, but effectively higher	None	₹10,000 after 10 years’ service
Family Pension	50% of pension last drawn	Depends on accumulated corpus	60% of pension last drawn
Lump Sum	Commutation of up to 40% pension (reduces monthly pension)	60% withdrawal of accumulated corpus at retirement	Lump sum = 1/10th of last pay + DA for every 6 months of service; pension unaffected
Indexation (DA link)	Full DA linked	Market-driven returns; no DA link	DA-linked inflation relief
Fiscal Burden	High, unfunded	Lower, market-based	Moderate (partially funded + assured)

[UPSC 2021] With reference to casual workers employed in India, consider the following statements:

1. All casual workers are entitled to Employees Provident Fund coverage.

2. All casual workers are entitled to regular working hours and overtime payment.

3. The government can, by notification, specify that an establishment or industry shall pay wages only through its bank account.

Which of the above statements are correct?

Options: (a) 1 and 2 only (b) 2 and 3 only* (c) 1 and 3 only (d) 1, 2, and 3