Unified Pension Scheme Benefits: The Unified Pension Scheme is going to be implemented from April 1, many benefits will be available..

The central government had announced the Unified Pension Scheme last year, in which guaranteed pension was assured for the central government employees coming under the National Pension System (NPS). However, the government has also made it clear that NPS will still be available for those who do not want to switch to UPS. That is, government employees will have the option to choose either NPS or UPS.

This scheme is only for central government employees, who are already registered under NPS. This new scheme is going to start for Central Government Employees from April 1, 2025.

The benefit of both NPS and OPS in UPS

Let us tell you that many labor organizations and stakeholders have been demanding to bring back the Old Pension Scheme for a long time, given that the central government has tried to find a middle way through this new scheme by combining some special features of both NPS and OPS.

Through investment in NPS equity and debt, government employees get the benefit of high pension growth, while OPS employees are given stable pension after retirement.

PFRDA recently released a detailed draft explaining all the guidelines, terms and conditions regarding the new scheme, despite this, many people are still questioning its rules.

Pension benefits for government employees will be improved.

The MP had recently asked the government whether UPI is being brought in place of the existing National Pension Scheme (NPS) and whether it is true that a committee has been formed with representatives of the government and employees to resolve controversial issues. The MP also enquired about the report, recommendations made by the committee, and their implementation. Responding to his questions, Minister of State for Finance Pankaj Chaudhary said that a Committee was constituted under the Chairmanship of the Finance Secretary to modify the National Pension System (NPS) to improve the pension benefits of government employees keeping in view the fiscal implications and overall budget.

The Minister said that this Committee had extensive discussions with key stakeholders including the employee side of the National Council and the State Government. Based on the recommendations of the Committee, the Union Cabinet gave its approval to the Unified Pension Scheme (UPS) on 24.08.2024. UPS was notified on 24.01.2025 for implementation from 01.04.2025.

Special features of the Unified Pension Scheme (UPS)

UPS aims to provide better financial security to government employees after retirement. Some of its special features include:

Guaranteed pension

Under UPS, pensioners will get 50% of their average basic salary (from the last 12 months before retirement) as a pension, provided they have completed at least 25 years of service. Those with less service period (minimum 10 years) will get a proportionate pension. Let us tell you that government employees who have served for more than 10 years but less than 25 years get proportionate pension after retirement.

Family Pension

There is a provision of family pension in this scheme. If the employee dies, then in such a situation, there is a provision to give 60% of the pension amount that the employee was getting before death to his spouse.

Minimum pension guarantee

UPS guarantees a minimum pension of Rs 10,000 to employees who retire after at least 10 years of service. That is, if you are working under the Central Government and you have completed ten years of service, then you will get a pension of at least ten thousand rupees every month after retirement.

Inflation protection

Based on the All India Consumer Price Index (AICPIN-IW) for Industrial Workers, like Dearness Relief (DR) for serving employees, the pension amount will also be adjusted with inflation. This means that the pension amount will also be increased according to the increase in inflation.

Lump sum payment at retirement

On retirement, employees will get a lump sum payment in addition to their gratuity. This amount will be 1/10th of their last monthly salary (basic salary + DA) for every six months of service. This benefit will not have any effect on the assured pension amount. Gratuity is calculated on the date of retirement.

When will UPS be implemented?

Unified pension scheme will be implemented from April 1, 2025. Due to the guaranteed pension facility, this new scheme is seen as a pension product which will provide more financial security to government employees than NPS. It is expected that the government will soon issue guidelines regarding the change from NPS (National Pension System) to UPS.

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