UPS vs NPS: NPS offers some benefits over UPS, despite the latter’s advantages. As an equity-linked savings vehicle, the NPS has the potential to generate higher returns and create more wealth over a longer time horizon. Axis Pension Fund’s calculations, as reported by ET, show that an employee’s retirement corpus and pension income can vary significantly depending on when they switch from the NPS to the UPS (see table).

The assumptions in the above calculations are: The accumulated corpus in the NPS at age 35 is Rs 15 lakh, and at age 45, it is Rs 40 lakh. The monthly basic salary at age 35 is Rs 50,000, and at age 45, it is Rs 1 lakh. The annuity rate with 25 years left for retirement is 4.75%, and with 15 years left, it is 5.5%. The return from a systematic withdrawal plan with 25 years left is 6%, and with 15 years left, it is 7%. The yearly pension increase is assumed to be 4%.