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Pension Scheme: UPS starts from April 1, know which employee will get how much benefit, check complete details

Unified Pension Scheme: Recently, the government has taken a big step and notified the Unified Pension Scheme (UPS) for central employees. This scheme will be implemented from April 1, 2025

Unified Pension Scheme: The central government has announced the Unified Pension Scheme (UPS) for employees. The government has offered the option of Unified Pension Scheme (UPS) to the central employees under the National Pension Scheme (NPS). Notification has been issued regarding this. This scheme was announced in August 2024. The government will implement UPAS from April 1, 2025.

UPS is the new scheme of the government. The central government has started UPS keeping in mind the financial security of government employees after retirement. The Unified Pension Scheme is available to central government employees who joined under NPS on or after January 1, 2004. According to a statement from the ministry, central government employees covered under NPS can now choose the Unified Pension Scheme as an option.

Benefit to more than 23 lakh central employees

The Pension Fund Regulatory and Development Authority (PFRDA) will issue the necessary rules for this. This scheme is considered beneficial for more than 23 lakh central government employees. Under this scheme, the government’s contribution will increase to 18.5 percent of the total amount of basic pay and dearness allowance (DA), which was 14 percent earlier. At the same time, employees will continue to contribute 10 percent for their pension.

Benefits of UPS

The UPS program has been launched in response to the persistent demand of government employees to restore the Old Pension Scheme (OPS), under which retired employees used to get 50 per cent of their last salary as pension. Under UPAS, government employees will contribute 10 per cent of their basic salary and dearness allowance, while the government will contribute 18.5 per cent. Apart from this, the government will contribute an additional 8.5 per cent to a separate pooled corpus. Under this scheme, after retirement, employees will get 50 per cent of their average salary of the last 12 months as pension.

Eligibility for UPS

The Unified Pension Scheme will be available only to those employees who have completed at least 10 years of service.

Benefits to employees on retirement

  • Pension guarantee: After retirement, every month you will get 50% of your average salary of the last 12 months as pension.
  • Pension will increase with inflation: Pension will increase from time to time according to inflation.
  • Family pension: If the employee dies, the family will get 60 percent of the pension.
  • Retirement benefits: A lump sum amount will be given along with gratuity at the time of retirement.
  • Minimum pension: Those who work for at least 10 years are guaranteed a pension of ₹ 10,000 per month.
  • Voluntary retirement option: After 25 years of service, you can take voluntary retirement. Your pension will start from the age when you reach the normal retirement age.

Can I leave NPS and join UPS?

Employees who are already in NPS can shift to this new scheme. However, once you shift to UPS, you cannot go back to NPS.

How will the change from NPS to UPS happen?

To avail the benefit of guaranteed pension in UPS, employees will have to transfer their entire NPS fund to UPS. If your NPS fund is less than the minimum amount fixed for UPS, then you will have to pay the difference yourself. If your fund is more than the prescribed limit, then the excess amount will be refunded to you.

DA and DR under UPS

The government’s contribution to UPS will increase from 14 per cent to 18.5 per cent, while the employee’s contribution will remain at 10 per cent of basic salary and dearness allowance. Dearness Relief (DR) will be calculated in the same way as Dearness Allowance (DA) is done for current employees and it will be given only when payments start. 10% of monthly salary (basic salary + dearness allowance) will be given as a lump sum payment for every 6 months of service after retirement. This lump sum payment will not affect the guaranteed payment amount.

Shyamu Maurya
Shyamu Maurya
Shyamu has done Degree in Fine Arts and has knowledge about bollywood industry. He started writing in 2018. Since then he has been associated with Informalnewz. In case of any complain or feedback, please contact me @informalnewz@gmail.com
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