UPS Calculator: How much money will you get after 30 years of service, what do the rules and calculations of the Unified Pension Scheme tell

UPS Calculator: To know how much benefit the government employees will get from the Unified Pension Scheme which is going to be implemented from April 1, 2025, it is important to understand the UPS calculator.

Unified Pension Scheme Calculator: The Unified Pension Scheme (UPS) for government employees is going to be implemented from April 1, 2025. This scheme will be applicable as an alternative option for the employees coming under the National Pension System (NPS). The UPS scheme has a provision for minimum pension, family pension, increase in pension according to the inflation index, and lump sum amount at the time of retirement. To know how much benefit the government employees will get from UPS, it is important to understand the rules of the scheme, the calculation of pension, and the use of the UPS calculator.

What is the Unified Pension Scheme?

The Unified Pension Scheme was approved by the Central Government in August 2024. Under this scheme, employees get a guaranteed minimum pension after retirement. This scheme is especially for those central government employees who are covered under NPS and choose this option. The main benefits available under the UPS scheme are:

Guarantee of minimum pension

Family pension

Increase in pension according to inflation.

Payment of lump sum amount at the time of retirement

Provision of gratuity

This scheme will also be applicable to those employees who retire after completing 10 years of service, take voluntary retirement (VRS), or whose retirement takes place under Rule 56 (j). Fundamental Rule (FR) 56 (j) is a provision of the Central Civil Services (CCS) Pension Rules, 1972, which allows the government to retire government employees prematurely.

How does the UPS calculator work?

By using the Unified Pension Scheme calculator, one can find out how much pension and lump sum an employee will get at the time of retirement. The government has also released an example of its calculation.

Formula and method of calculation

According to the government, 1/10th of the total salary is taken out by combining the basic pay and dearness allowance (DA) at the time of retirement and it is multiplied by the number of half-years (L) included in the job period.

Formula:

Lump sum amount = (1/10 X total salary) X L

Where,

Total salary = Basic pay + DA

L = number of half-years completed during the job (for a 10-year job, the number of half-years will be L = 20.)

How much money will be received after 30 years of service?

According to the government, if an employee's basic pay at the time of retirement is Rs 45,000 and DA 53% i.e. Rs 23,850, then his:

Total salary = Rs 45,000 + 23,850 = Rs 68,850

Now, if the employee has completed 30 years of service, he would have completed 60 half-years (30 years = 60 half-years).

Lump sum payment amount = (1/10 X 68,850) X 60 = 6,885 X 60 = Rs 4,13,100

Thus, after 30 years of service, the employee will receive a lump sum amount of around Rs 4.13 lakh.

Other benefits of UPS

Minimum pension guarantee: The UPS scheme guarantees a minimum pension after retirement, which provides financial security for employees.

Inflation Index: Pension will increase from time to time based on the inflation rate.

Family Pension: After the death of an employee, the family will get the benefit of a pension.

Gratuity: Gratuity will also be paid at the time of retirement.

Unified Pension Scheme guarantees financial security and pension to government employees. Using the UPS calculator, employees can easily estimate their pension and lump sum amount received at the time of retirement. This scheme will come into effect from April 1, 2025, and aims to meet the financial needs of the employees after their retirement.