Unified Pension Scheme from 1st April: The central government is going to launch the Unified Pension Scheme (UPS) from April 1. This scheme is especially beneficial for those employees who want a fixed income after retirement.
Unified Pension Scheme from 1st April: There is good news for 23 lakh employees of the central government. Actually, the central government is bringing a new scheme Unified Pension Scheme (UPS) for its employees. Under this scheme, central employees who have been serving for at least 25 years will be eligible to get 50 percent of their average basic salary of the last 12 months before retirement as pension under UPS from April 1.
With this scheme, the government is preparing to provide financial security to at least 23 lakh central employees after retirement. UPS is being brought especially keeping in mind those people who like a stable and predictable income instead of a market-linked pension.
Designed as a hybrid model
Under the new scheme, employees who have served for more than 10 years but less than 25 years will get a minimum pension of Rs 10,000 every month. In case of death of the pensioner, his family will get 60 per cent of the last pension as family pension. Apart from this, central government employees, who are currently under the National Pension Scheme (NPS), can switch to UPS. This scheme has been designed as a hybrid model, which includes features of both Old Pension Scheme (OPS) and National Pension System (NPS).
How UPS was started
NPS gives market-based returns without any fixed payment, while the new scheme, unlike NPS, ensures a guaranteed pension income. OPS was replaced by NPS in 2004. UPS was started in view of the growing concerns among government employees about the uncertainties of NPS.
UPS notification issued
Many government employees demanded a more predictable pension system to ensure financial stability after retirement. The government’s target through this new scheme is to balance employee security with their financial responsibilities. Those who have served for more than 25 years will benefit the most from 50 percent guaranteed pension. Last week, the Pension Fund Regulatory and Development Authority (PFRDA) has issued a notification regarding this. Central government employees will be able to apply on the portal from April 1.
