Unified Pension Scheme: The central government has announced the implementation of the Unified Pension Scheme (UPS) for government employees covered under the National Pension System (NPS). This scheme will come into effect from April 1, 2025. The aim of the scheme is to provide more secure pension service to the employees.
Unified Pension Scheme: The central government has announced the implementation of the Unified Pension Scheme (UPS) for government employees covered under the National Pension System (NPS). This scheme will come into effect from April 1, 2025. The aim of the scheme is to provide more secure pension service to the employees. According to the notification issued by the government, once the employee chooses the UPS option, he will not be able to go back to NPS. This scheme is not only for central government employees, but state governments can also implement it for their employees if they want.
Pension and Benefits
Under the Unified Pension Scheme, 50% of the average basic salary of the last 12 months before retirement will be available as pension, provided the employee has completed a minimum of 25 years of service. If the employee has served between 10 to 25 years, a minimum monthly pension of Rs 10,000 will be given. Employees taking voluntary retirement, who have completed 25 years of service, will start getting this pension from the same age at which they would have taken normal retirement. If the pensioner dies, the family will get 60% of the pension.
Relief from inflation
The government has clarified that pension, family pension and minimum pension will be linked to Dearness Relief. The advantage of this will be that inflation will not affect the pensioners.
Money will be received together on retirement
At the time of retirement, employees will get an additional amount in addition to gratuity. This amount will be 1/10th of the basic salary and dearness allowance for every six months of completed service. This lump sum amount will not have any effect on the pension.
Pension fund and contribution
Two funds will be created under the Unified Pension Scheme
Individual Corpus: In this, the employee and the central government will contribute equally.
Pool Corpus: In this, the government will make additional contribution. Employees will have to contribute 10% of their basic salary + dearness allowance (DA), which the government will deposit in equal proportion. Apart from this, the government will give an additional 8.5% contribution to the pool fund.
Investment Options
Employees will have the freedom to choose investment options for their personal funds. If an employee does not choose the option, the default investment plan prescribed by the Pension Fund Regulatory and Development Authority (PFRDA) will apply.
