Now a big update has come regarding retirement planning for central employees. PFRDA has launched a new tool that will help in knowing whether the National Pension System i.e. NPS is better or the Unified Pension Scheme (UPS). With the help of this new pension calculator, employees can estimate in advance how much benefit will be there from which scheme after retirement.

Which scheme is more beneficial for you between NPS and UPS

UPS will apply to all new central employees from 1 April 2025. However, employees who are already under the purview of NPS can shift to UPS if they want. The difference is that NPS is completely market-linked, while UPS gives a fixed and estimated pension. In such a situation, the calculator has become an easy way to understand which scheme is more beneficial for you.

Using this calculator is very simple. You just have to give some basic information like your retirement age, monthly basic pay, NPS Tier I corpus, and monthly contribution. The tool then shows you how much total corpus you will receive upon retirement, how much pension you will receive every month, and how much lump sum amount you will receive.

For example, if an employee is 44 years old, started working at the age of 24, and will retire at the age of 60, his current monthly basic pay is Rs 40,000 and till now he has deposited a corpus of Rs 10 lakh in NPS, then the figures for UPS and NPS will be something like this:

Talking about monthly pension:

In UPS, the pension will be around Rs 32,360 (plus DA relief), while in NPS you will get Rs 29,762
Lump sum amount: Under UPS, you will get Rs 13,44,160, whereas this does not apply in NPS
Final withdrawal amount: In UPS, you will get Rs 72,87,263, in NPS it will be Rs 82,41,741
Total monthly payouts after retirement: UPS will give Rs 1,06,52,260, while NPS will give you Rs 1,06,52,260 71,42,842
If we combine all three categories, UPS gives a benefit of about 1,92,83,686 while in NPS this figure is 1,53,84,584. That is, if we compare, UPS gives a benefit of about 39 lakh more.

Now talking about the UPS scheme, it is a fund-based system in which every month both the employee and the government contribute 10% of the basic pay and DA. Apart from this, an additional 8.5% is also put by the government in a public pool so that a stable pension can be ensured.

This calculator has become an important tool for choosing the right scheme for retirement. Through this, employees can easily know whether it is better for them to remain in NPS or going to UPS would be a wise decision.