Pension Tips: If you choose the UPS option, how much pension will you get after 25 years of service? know here...
The central government has recently launched the Unified Pension Scheme (UPS) to provide pensions to government employees. This scheme will come into effect on 1 April 2025. Under this scheme, a minimum pension of Rs 10,000 has been fixed for 10 years of service, while the pension calculation for 25 years of service will be done by another formula. In such a situation, the pension given after retirement will be based on their years of service and average income. Also, in this new scheme, provision has been made for family pension after the death of the employee. Let us tell you that if the employees choose the option of UPS, then how much pension they will get according to their salary?
Know what will be the formula for pension calculation
Contribution will have to be made in UPS like NPS. Meaning employees will have to contribute 10 percent and the government will contribute 18.5% in it. The government contributes 14 percent to NPS, so the government's contribution to UPS will be more. If you invest for 25 years, then as a pension amount, you will be given 50 percent of the average basic salary of 12 months and DR added to it. At the same time, after the death of the employee, 60 percent of the employee's pension will be given as a family pension.
How much pension on 50, 60 and 70 thousand basic salary
After working for 25 years, if you do a lump sum calculation according to the formula, if your average basic pay of the last 12 months adds up to 50 thousand, then you will get 50 percent of it i.e. pension of 25 thousand rupees. However, after this, Dearness Relief (DR) will be added separately. At the same time, when the basic salary becomes 60,000, the pension will be given to you by adding 30,000 + DR and when the basic salary is 70,000, the pension will be given by adding 35,000 + DR.
How much will be the family pension?
In such a situation, if the family pension is calculated, it will be 60 percent of your pension. In such a case, the family of a person receiving a pension of Rs 25,000 will get a pension of 60% of 25,000 = Rs 15,000 + DR. The family of a person receiving a pension of Rs 30,000 will get a pension of 60% of 25,000 = Rs 18,000 + DR. And the family of a person receiving a pension of Rs 35,000 will get a family pension of 60% of 35,000 = Rs 21,000 + DR.
UPS Vs NPS
UPS is a secure scheme. Whereas, NPS is linked to the stock market.
UPS has a provision for a lump sum amount on retirement, which will be calculated as the 10th part of the basic salary and dearness allowance for every 6 months of service of the employee. Whereas, 60 percent of the total deposit amount in NPS can be withdrawn in a lump sum on retirement and 40 percent is kept for annuity.
There is no investment to get a pension in UPS, whereas 40 percent of the fund has to be invested in NPS.
There is a provision of a pension of Rs 10,000 per month after working for 10 years in UPS. Whereas there is no such provision in NPS, your pension in NPS depends on a 40 percent annuity.
UPS is only for government employees. Whereas, NPS is for employees of both government and private sectors.
