New Delhi: The Union Cabinet, led by Prime Minister Narendra Modi, has approved the Unified Pension Scheme (UPS) on Saturday. The scheme is designed to provide government employees with an assured pension, family pension and a guaranteed minimum pension. State governments will have the option to adopt the UPS as well, which could expand the number of beneficiaries to around 9 million if they choose to participate.
The government has estimated that the cost of arrears will be about Rs 800 crore and an annual increase in expenses of around Rs 6,250 crore in the first year. The scheme is set to take effect on April 1, 2025. Central government employees will have the option to choose between the National Pension Scheme (NPS) and the new UPS and current NPS subscribers in the central government will also be given the choice to switch to the UPS.
Here’s what you need to know:
- Assured Pension:
- 50 per cent of the average basic pay drawn over the last 12 months before the superannuation for a minimum qualifying service of 25 years.
- Proportionate for lesser service, with a minimum of 10 years of service required.
- Assured Family Pension:
- 60 per cent of the pension of the employee immediately before their demise.
- Assured Minimum Pension:
- Rs 10,000 per month upon superannuation after a minimum of 10 years of service.
- Inflation Indexation:
- Applies to assured pension, assured family pension and assured minimum pension.
- Dearness relief based on the All India Consumer Price Index for Industrial Workers (AICPI-W), similar to serving employees.
- Lump-sum Payment at Superannuation:
- In addition to gratuity, 1/10th of the monthly emolument (pay + DA) as on the date of superannuation for every completed six months of service.
- The payment will not reduce the quantum of the assured pension.
Union Minister Ashwini Vaishnaw announced the details of the scheme. He said that the Centre formed a committee which conducted 100 meetings with several leading organisations, including the RBI and the World Bank, to finalise decisions for the scheme that will benefit 23 lakh central government employees.
