Odisha Implements Unified Pension Scheme for Employees

The Odisha government, led by Chief Minister Mohan Majhi, has announced the implementation of the Unified Pension Scheme (UPS) for government employees. This decision aligns with the Central Government’s policy to enhance pension benefits. The Cabinet approved this initiative on February 7, 2025. The UPS is set to be operational from April 1, 2025, and aims to provide assured pension benefits to eligible employees.

Overview of the Unified Pension Scheme

• The Unified Pension Scheme is designed to improve upon the existing National Pension Scheme (NPS).
• The Union Cabinet approved the UPS in August 2024.
• It aims to address the needs of various service organisations, ensuring appropriate pensions that consider compulsory pensions, family pensions, and inflation.

Pension Eligibility and Benefits

Under the UPS, employees who complete 25 years of service will receive a pension. The pension amount will be 50% of the average basic pay or the basic pay earned in the last 12 months before retirement. For employees with a service period of 10 to 25 years, the pension will be calculated proportionately.

Family Pension Provisions

The family pension will be set at 60% of the pension amount the employee was receiving before their death. This provision is enhancement compared to the NPS, which did not guarantee family pension benefits after retirement.

Minimum Pension and Dearness Relief

The minimum monthly pension for employees completing 10 years of service will be ₹10,000. Additionally, dearness relief will be applied based on the Consumer Price Index, ensuring that pension benefits keep pace with inflation.

Employee Options Under UPS

Employees currently enrolled in the NPS will have the option to switch to the UPS or remain with the NPS. This flexibility allows employees to choose a pension scheme that best suits their financial needs.

Supporting Housing Initiatives

In addition to the UPS, the Odisha government has approved the An Griha Yojana (AGY), allocating ₹7,550 crore to provide concrete houses for the poorest families. This initiative aims to assist families affected by natural disasters, displacement, and other hardships. Beneficiaries will receive ₹1,20,000 for constructing houses of 25 square metres.

Investment in Sports Infrastructure

The government plans to construct stadiums at the block level across all 314 blocks in Odisha. This initiative aims to promote health and wellness through sports. An investment of ₹4,124 crore will be made over five years for this project.

Questions for UPSC:

1. Critically analyse the implications of the Unified Pension Scheme on the financial security of government employees in Odisha.
2. Estimate the impact of the An Griha Yojana on housing conditions for families living below the poverty line in Odisha.
3. Point out the differences between the National Pension Scheme and the Unified Pension Scheme in terms of benefits and eligibility.
4. What are the potential benefits of investing in sports infrastructure for community health? Discuss with examples.

Answer Hints:

1. Critically analyse the implications of the Unified Pension Scheme on the financial security of government employees in Odisha.

1. The UPS provides assured pensions, enhancing financial security for employees after retirement.
2. Employees with 25 years of service receive 50% of their average basic pay, ensuring a stable income.
3. Family pensions at 60% of the employee’s pension offer additional security for dependents.
4. The minimum pension of ₹10,000 ensures a basic financial safety net for long-serving employees.
5. Inflation-adjusted dearness relief helps maintain the purchasing power of pensions over time.

2. Estimate the impact of the An Griha Yojana on housing conditions for families living below the poverty line in Odisha.

1. AGY aims to provide concrete housing to the poorest families, improving living conditions .
2. Financial assistance of ₹1,20,000 per household facilitates the construction of safer, more durable homes.
3. The scheme targets families previously excluded from housing programs, addressing historical inequities.
4. At least 2,25,000 new houses will be built, potentially reducing homelessness and improving community stability.
5. Better housing can lead to improved health outcomes and overall quality of life for beneficiaries.

3. Point out the differences between the National Pension Scheme and the Unified Pension Scheme in terms of benefits and eligibility.

1. The NPS does not guarantee family pension benefits after retirement, while UPS provides a family pension at 60% of the employee’s pension.
2. UPS offers assured pensions for employees with a minimum of 10 years of service, whereas NPS has no such guarantee.
3. Pension under UPS is based on the average basic pay, while NPS relies on market-linked returns.
4. UPS has a minimum monthly pension of ₹10,000, which is not guaranteed under NPS.
5. Employees can choose to switch from NPS to UPS, providing more flexibility in retirement planning.

4. What are the potential benefits of investing in sports infrastructure for community health? Discuss with examples.

1. Investing in sports infrastructure promotes physical activity, reducing obesity and related health issues.
2. Access to local sports facilities encourages community engagement and social cohesion.
3. Sports programs can improve mental health by providing recreational outlets and reducing stress.
4. Examples include community leagues and fitness programs that encourage teamwork and healthy competition.
5. Improved sports facilities can lead to better performance in regional and national competitions, boosting local pride.