Retirement Benefits Calculation (OPS/UPS/NPS): A Comprehensive Overview. Download OPS Vs UPS Vs NPS Retirement Pension Calculation Overview in PDF
As individuals approach retirement, understanding their financial future becomes crucial. This article outlines the retirement benefits based on varying years of service under different pension schemes: the Unified Pension System (UPS) and the New Pension System (NPS).
Current Profile
- Age: 34 years
- Current Service: 12 years
- Basic Salary: ₹45,000
- Dearness Allowance (DA): 50% of Basic Salary
1. Retiring Now (12 Years of
Service)
Salary Breakdown:
- Basic Salary: ₹45,000
- DA: 50% of Basic Salary = ₹22,500
- Total Emoluments (Basic + DA): ₹67,500
Unified Pension System (UPS):
- Pension Calculation: Proportional pension
(12/25) of 50% of Basic Salary
- Monthly Pension: Pension=50%×(1225)×45,000=₹10,800\text{Pension}
= 50\% \times \left(\frac{12}{25}\right) \times 45,000 = ₹10,800Pension=50%×(2512)×45,000=₹10,800
New Pension System (NPS):
- Total NPS Corpus (approx.): ₹18 lakh
- Lump Sum (20% of Corpus): ₹3.6 lakh
- Corpus for Pension: Corpus=80%×18 lakh=₹14.4 lakh\text{Corpus}
= 80\% \times 18 \text{ lakh} = ₹14.4 \text{ lakh}Corpus=80%×18 lakh=₹14.4 lakh
- Annual Pension: 7%×14.4 lakh=₹1.008 lakh7\%
\times 14.4 \text{ lakh} = ₹1.008 \text{ lakh}7%×14.4 lakh=₹1.008 lakh
- Monthly Pension: 1.008 lakh12=₹8,400\frac{1.008
\text{ lakh}}{12} = ₹8,400121.008 lakh=₹8,400
2. Retiring After 8 Years (20
Years of Service)
Salary Breakdown (after 20
years of increments):
- Basic Salary: 45,000×(1+0.03)20=₹60,23545,000
\times (1 + 0.03)^{20} = ₹60,23545,000×(1+0.03)20=₹60,235
- DA: DA=60,235×0.50=₹30,118DA = 60,235 \times
0.50 = ₹30,118DA=60,235×0.50=₹30,118
- Total Emoluments: Total=60,235+30,118=₹90,353Total
= 60,235 + 30,118 = ₹90,353Total=60,235+30,118=₹90,353
Unified Pension System (UPS):
- Monthly Pension: Pension=50%×(2025)×60,235=₹24,094\text{Pension}
= 50\% \times \left(\frac{20}{25}\right) \times 60,235 = ₹24,094Pension=50%×(2520)×60,235=₹24,094
New Pension System (NPS):
- Total NPS Corpus (approx.): ₹30 lakh
- Lump Sum (20% of Corpus): ₹6 lakh
- Monthly Pension: Annual Pension=7%×24 lakh=₹1.68 lakh\text{Annual
Pension} = 7\% \times 24 \text{ lakh} = ₹1.68 \text{ lakh}Annual Pension=7%×24 lakh=₹1.68 lakh
Monthly Pension=1.68 lakh12=₹14,000\text{Monthly Pension} =
\frac{1.68 \text{ lakh}}{12} = ₹14,000Monthly Pension=121.68 lakh=₹14,000
3. Retiring After 13 Years (25
Years of Service)
Salary Breakdown (after 25
years of increments):
- Basic Salary: 45,000×(1+0.03)25=₹73,09145,000
\times (1 + 0.03)^{25} = ₹73,09145,000×(1+0.03)25=₹73,091
- DA: DA=73,091×0.50=₹36,546DA = 73,091 \times
0.50 = ₹36,546DA=73,091×0.50=₹36,546
- Total Emoluments: Total=73,091+36,546=₹109,637Total
= 73,091 + 36,546 = ₹109,637Total=73,091+36,546=₹109,637
Unified Pension System (UPS):
- Monthly Pension: Pension=50%×73,091=₹36,546\text{Pension}
= 50\% \times 73,091 = ₹36,546Pension=50%×73,091=₹36,546
New Pension System (NPS):
- Total NPS Corpus (approx.): ₹51 lakh
- Lump Sum (20% of Corpus): ₹10.2 lakh
- Monthly Pension: Annual Pension=7%×40.8 lakh=₹2.856 lakh\text{Annual
Pension} = 7\% \times 40.8 \text{ lakh} = ₹2.856 \text{ lakh}Annual Pension=7%×40.8 lakh=₹2.856 lakh
Monthly Pension=2.856 lakh12=₹23,800\text{Monthly Pension} =
\frac{2.856 \text{ lakh}}{12} = ₹23,800Monthly Pension=122.856 lakh=₹23,800
4. Retiring at Age 60 (26
Years of Service)
Salary Breakdown (after 26
years of increments):
- Basic Salary: 45,000×(1+0.03)26=₹97,02045,000
\times (1 + 0.03)^{26} = ₹97,02045,000×(1+0.03)26=₹97,020
- DA: DA=97,020×0.50=₹48,510DA = 97,020 \times
0.50 = ₹48,510DA=97,020×0.50=₹48,510
- Total Emoluments: Total=97,020+48,510=₹145,530Total
= 97,020 + 48,510 = ₹145,530Total=97,020+48,510=₹145,530
Unified Pension System (UPS):
- Monthly Pension: Pension=50%×97,020=₹48,510\text{Pension}
= 50\% \times 97,020 = ₹48,510Pension=50%×97,020=₹48,510
- Lump Sum Calculation: Lump Sum=145,53010×(260.5)=₹27,56,186\text{Lump
Sum} = \frac{145,530}{10} \times \left(\frac{26}{0.5}\right) = ₹27,56,186Lump Sum=10145,530×(0.526)=₹27,56,186
New Pension System (NPS):
- Total NPS Corpus (approx.): ₹1.87 crore
- Lump Sum (40% of Corpus): ₹74.8 lakh
- Monthly Pension: Annual Pension=7%×1.12 crore=₹7.84 lakh\text{Annual
Pension} = 7\% \times 1.12 \text{ crore} = ₹7.84 \text{ lakh}Annual Pension=7%×1.12 crore=₹7.84 lakh
Monthly Pension=7.84 lakh12=₹65,333\text{Monthly Pension} =
\frac{7.84 \text{ lakh}}{12} = ₹65,333Monthly Pension=127.84 lakh=₹65,333
Summary Table
|
Retirement Scenario |
Basic Salary |
DA |
Total Emoluments |
Pension (UPS) |
Pension (NPS) |
Lump Sum (NPS) |
|
Retiring Now (12 Years) |
₹45,000 |
₹22,500 |
₹67,500 |
₹10,800 |
₹8,400 |
N/A |
|
Retiring After 20 Years |
₹60,235 |
₹30,118 |
₹90,353 |
₹24,094 |
₹14,000 |
₹6,000 |
|
Retiring After 25 Years |
₹73,091 |
₹36,546 |
₹109,637 |
₹36,546 |
₹23,800 |
₹10.2 lakh |
|
Retiring at Age 60 (26 Years) |
₹97,020 |
₹48,510 |
₹145,530 |
₹48,510 |
₹65,333 |
₹74.8 lakh |
Conclusion
Understanding the retirement
benefits available under different scenarios is essential for financial
planning. The UPS and NPS offer various pension options, ensuring a stable
income after retirement. As policies may change, it's advisable to consult official
sources or a financial expert for personalized advice. This will ensure you
make informed decisions for a secure retirement.
