Centre notifies Unified Pension Scheme for govt employees under NPS
Delhi, Jan 25, 2025
Launched in August, UPS strikes a balance between Old Pension Scheme (OPS) and New Pension Scheme (NPS), offering government employees a guaranteed pension, post-retirement
Five months after launching a revamped pension scheme for government employees, the central government on Saturday officially notified the implementation of the Unified Pension Scheme (UPS). The scheme will come into effect from April 1, 2025.
Launched in August, UPS strikes a balance between the Old Pension Scheme (OPS) and the National Pension Scheme (NPS), offering government employees a guaranteed pension post-retirement, ensuring their financial security.
Conditions for UPS
The scheme will be applicable only to central government employees who are covered under the NPS and choose the UPS option. According to the notification, existing central government employees, as well as future employees, can choose to either take the UPS option under the NPS or continue with the NPS without the UPS option.
The notification made it clear that those exercising the UPS option shall not be entitled to, and cannot claim, any other policy concession, policy change, financial benefit, or any other parity with subsequent retirees, etc.
The scheme, formulated after the recommendations of a high-level panel led by Cabinet Secretary TV Somanathan, had earlier announced that employees who were covered under the NPS and have already retired would also be covered by the UPS. The present notification says that the Pension Fund Regulatory and Development Authority (PFRDA) will determine a mechanism for such retirees who opt for the UPS.
Different payout calculations
Based on the number of years in service, payout calculation will be of three types:
Full assured payout: It will be for employees with 25 or more years of service experience. They will get an assured pension of 50 per cent of their average basic pay over the last 12 months.
Proportional payout: It will be for employees with less than 25 years of service experience.
Minimum guaranteed pension: Employees with at least 10 years of qualifying service will get an assured payout of Rs 10,000 per month.
Other benefits
The notified UPS assures government employees of 'periodic dearness relief', akin to the dearness allowance for serving employees, in line with inflation trends. The scheme also assures a family pension equivalent to 60 per cent of a government employee's pension in case of their demise, and a lump sum superannuation payment at the time of retirement, in addition to gratuity benefits.
[The Business Standard]
