The Unified Pension Scheme will give benefit 23 lakh central government employees immediately.This number could increase to 90 lakh if state governments agree to join the scheme
The central government approved the Unified Pension Scheme (UPS) for central government employees which will impact 23 lakh employees. Its goal is to give government workers stability and financial security after they retire
Unified pension scheme will it benefit employee
Unified Pension Scheme: Prime Minister Narendra Modi-led Cabinet has approved the Unified Pension Scheme for Government employees. This is announced by Information and Broadcasting and Railway Minister Ashwini Vaishnaw. Vaishnaw said the New Unified Pension Scheme will benefit 23 lakh central government employees.
The Unified Pension Scheme will be implemented from 1st April,2025
key features of the Unified Pension Scheme
Assured Pension: Employee with at least 25 years of service will be guaranteed a pension equal to 50% of their average basic pay for the final year before retirement. The pension will be proportionate with the period of service for individuals who have served less than 25 years; the minimum qualifying service time is 10 years.
Assured Family Pension: If an Employee pass away, their spouse will be guaranteed a family pension, which will be 60% of the pension that the employee was receiving before to their death.
Assured Minimum Pension: The employees who have completed a minimum of 10 years of service, there is a guaranteed minimum pension of ₹ 10,000 per month upon retirement.
Inflation Indexation: The family pension and the guaranteed pension are both indexed for inflation. This adjustment guarantees that the pensions remain in line with inflation.
Dearness Relief: Retirees under the UPS would receive Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to serving employees do.
Total Amount of Superannuation Payment: At the time of superannuation, employees will also get a lump sum payout in addition to a gratuity. For each full six months of service, this payment will be equal to one-tenth of the employee’s monthly emoluments (including pay and Dearness Allowance) as of the retirement date. The guaranteed pension amount will not be lowered by this lump sum payout.
23 lakh central government employees are expected to immediately profit from the Unified Pension Scheme. If state governments agree to participate in the program, however, the number might increase to 90 lakh, providing benefits to a greater number of Indian government employees.
The declaration was made in response to demands from employee organizations in several other states and decisions by certain non-BJP states to return to the DA-linked Old Pension Scheme (OPS).
The National Pension Scheme (NPS) has been implemented for all government employees except those in the armed forces joining the central government on or after January 1, 2004.
Retired government workers earned monthly pensions under the OPS equal to 50% of their last drawn wage. With each increase in the DA rates, the sum keeps rising. Due to its non-contributory nature and growing financial load on the exchequer, OPS is not financially viable.
Eligibility for the Unified Pension Scheme
Employees who have worked for the UPS for at least ten years are qualified for a pension, according to Ashwini Vaishnaw. But only individuals with a minimum of 25 years of service are eligible for the full advantages of the scheme, which includes the guaranteed pension.
For current National Pension System (NPS) employees and those choosing the Voluntary Retirement Scheme (VRS) within NPS, the program is optional. There will also be an opportunity for future workers to join UPS. However, an employee’s decision to join UPS is a final and cannot be changed once made.
Under the Unified Pension Scheme or UPS, there will be a provision of a fixed assured pension, unlike the New Pension Scheme (NPS) which does not promise a fixed pension amount.
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