New Delhi, April 10 -- Central government employees are in a dilemma. They have to choose between two pension schemes - the National Pension System (NPS) and the Unified Pension Scheme (UPS), which was implemented on 1 April.

UPS offers a guaranteed pension for life and 60% of it for your spouse. NPS, on the other hand, allows you to withdraw 60% of the corpus as a tax-free lump sum and invest the remaining 40% into an annuity to receive a pension. You are free to invest the lump sum wherever you want to generate regular income.

Which system is better? Let's explore the nuances to find out.

In UPS, 20% of your basic pay + dearness allowance (DA) goes into creating your corpus. You contribute 10% and the government matches it. The gover...