UPS vs OPS Pension Calculations: Where will you get higher pension on Rs 1,07,000 last-drawn average basic pay, 33 years of service?

This is the oldest pension system in India, first introduced in the 19th century. It has gone through many changes ever since. One of the prominent ones was in 1998 when the retirement age for employees was raised from 58 years to 60. The system is still followed by crores of employees across India – central as well as state governments. The retiree can also commute up to 40 per cent of their pension, where they withdraw a lump sum at retirement and get a reduced pension for 5 years. It also has the provision of a family pension.

It offers the facilities of NPS and OPS both, where a retiree gets an assured pension and may get a higher amount based on the performance of their investment for UPS. The employee also gets a lump sum amount at retirement. UPS also offers a family pension.

The minimum service years required for an employee to get a pension under OPS is 10 years. They don't have to contribute to any fund to get their pension.

The OPS pension will depend on the greater of the 2 amounts – the average of the sum of 10-month average emoluments (basic pay+NPA) or the sum of last month's emoluments (basic pay+NPA); of the 2. The pension amount will be 50 per cent of either of the figures.

If the employee wants, they can commute up to 40 per cent of their pension. They will receive a lump sum amount in lieu of that. This lump sum is calculated with reference to the Commutation Table. The monthly pension will be by the portion commuted. The commuted portion will be restored on the expiry of 15 years from the date of receipt of the commuted value of the pension.  The formula for Commuted Value of Pension (CVP) is CVP = 40 % (X) Commutation factor (X) 12

Since the scheme so far is open only to central government employees, the employee contributes 10 per cent of their basic pay and dearness allowance (DA), while the employer contributes 18.5 per cent of the employee's basic pay and DA. Out of this amount, 20 per cent is invested in a market-linked programme and 8.5 per cent in a pool for assured pension.

The minimum assured pension is Rs 10,000 on completion of 10 years of service. The maximum is 50 per cent of the average of the last 12 months' basic pay and DA immediately prior to superannuation.  Pension can increase from the assured amount if the performance of the invested amount is good.

In UPS, if a pensioner dies after superannuation, their family will get a pension that will be 60 per cent of the payout admissible to the payout holder immediately before their death.

The lump sum amount a UPS pension holder will receive will be 10 per cent of their monthly emoluments (basic pay+DA) for every completed six months of qualifying service.

We are calculating all amounts at a 55 per cent DA rate. Rs 82,925.000

Rs 49,755

Rs 10,94,610

Rs 82,925

Rs 49,755

Rs 32,61,539.76 Pension after commutation will be Rs 49,755