Monday, March 31, 2025
NPS vs UPS
NPS vs UPS: Key Takeaways
Author: Choudhury Mohammad Ikbal Bahar Yousuf, Circle Secretary, NUPE Postman MTS, Assam Circle, Karimganj HQ.
Understanding NPS & UPS
For employees confused between NPS (National Pension System) and UPS (Union Pension Scheme), here is a simplified explanation.
- If an employee completes their entire 30-year service under NPS, then NPS is the better choice.
- If an employee serves only 10-12 years and becomes permanent, they should opt for UPS.
Comparing Benefits of NPS & UPS
Assume at the time of retirement, your basic salary is ₹2,00,000:
- Under UPS, your pension would be ₹1,00,000 per month.
- Under NPS, you can accumulate ₹2-3 crores in corpus.
Withdrawal & Investment Options
- You can withdraw 60% of the NPS corpus as a lump sum.
- The remaining 40% must be used for a pension plan.
- The lump sum can be invested in:
- SCSS (Senior Citizen Savings Scheme)
- SWP (Systematic Withdrawal Plan)
- MIS (Monthly Income Scheme)
Retirement Projections
- At retirement, if 60% withdrawal = ₹2 crores, withdrawing ₹2 lakh/month allows sustenance for at least 10 years.
- Due to compounding, the next ₹1 crore will grow faster.
- India’s average life expectancy is 67-70 years, making long-term planning crucial.
Important Notice
The Government has set a deadline of June 30 for migrating from NPS to UPS. After this, switching will no longer be allowed.
Make a responsible decision based on your risk preference.
Understanding the Rule 37 transfer
Understanding the Rules
Rule 37 typically refers to a transfer initiated by the government/department (also called "in public interest" transfers), while Rule 38 generally refers to request transfers initiated by the employee.
Possible Solutions
Administrative Appeal
File a representation to the Head of Department citing that Rules 37 and 38 serve different purposes and there's no explicit provision preventing an application under Rule 38 after a Rule 37 transfer
Reference FR 15 which generally guarantees the right of a government servant to apply for a transfer
Seek Relaxation of Rules
Apply for relaxation of rules under the appropriate provisions (usually available with the Department of Personnel & Training or equivalent authority)
Cite exceptional circumstances, if any (medical grounds, family circumstances, etc.)
Use Alternative Transfer Provisions
Explore transfer under Rule 38-A if applicable (mutual transfer with another willing employee)
Consider deputation options if available in your service rules
Medical/Personal Hardship Route
If applicable, apply for transfer on documented medical grounds supported by a medical certificate
If there are genuine hardships (aged parents, spouse posting, children's education), these can be grounds for special consideration
Judicial Remedies
If administrative remedies fail, judicial options include:
Central Administrative Tribunal (CAT)
File an application in the appropriate bench of CAT
Refer to cases like Shyam Sunder Sharma vs Union of India where the court has held that transfer policies should not be interpreted in a manner that causes undue hardship
High Court Writ Petition
After exhausting the CAT route, approach the relevant High Court under Article 226
Relevant precedents include:
S.K. Jha vs Union of India & Ors where the court emphasized reasonable interpretation of transfer rules
Rajendra Singh vs State of U.P. where arbitrary application of transfer policies was struck down
Related Orders/Circulars
Consider referencing:
DOPT OM No. AB.14017/41/2009-Estt.(RR) regarding compassionate transfers
DOPT OM No. 28034/9/2009-Estt.(A) on posting of husband and wife at the same station
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