Union Finance Minister Nirmala Sitharaman on Tuesday clarified that the Unified Pension Scheme (UPS) is not compulsory for state governments, allowing them the autonomy to decide whether or not to adopt the scheme. This statement came in response to criticism from the Congress party, which dubbed the government a “rollback government” following the introduction of UPS. Sitharaman responded to the criticism by labeling the Congress as a “naara (sloganeering) party,” dismissing their remarks as politically motivated. The UPS was designed to address and resolve issues that had arisen from both the Old Pension Scheme (OPS) and the National Pension System (NPS). According to Sitharaman, the UPS provides a pro-rata benefit for employees with a service period of less than 25 years. The Pension Fund Regulatory and Development Authority (PFRDA) will continue managing the pension funds under UPS, ensuring that the scheme’s financial management remains robust and transparent. Moreover, Sitharaman reassured stakeholders that there would be no changes to the tax treatment under UPS, maintaining consistency with existing financial regulations.
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