The Centre will implement a Unified Pension Scheme from April 1 to benefit 23 lakh Central government employees, particularly those who prefer a stable and predictable income instead of a market-linked pension.
From April 1, 2025, Central government employees with at least 25 years of service will be eligible for a fixed pension equal to 50 per cent of their average basic salary from the last 12 months before retirement under the new Unified Pension Scheme (UPS).
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The Centre is introducing the UPS to offer more financial security after retirement to at least 23 lakh Central government employees, particularly for those who prefer a stable and predictable income instead of a market-linked pension.
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The employees, who have served for more than 10 years, but less than 25 years, will receive a minimum pension of Rs 10,000 per month. In case of the pensioner’s death, their family will be entitled to 60 per cent of the last pension drawn as a family pension.
The Central government employees, currently under the National Pension System (NPS), will have the option to switch to the UPS.
The scheme is designed as a hybrid model, incorporating features from both the Old Pension Scheme (OPS) and the NPS.
Unlike the NPS, which offers market-based returns without any fixed payout, the UPS ensures a guaranteed pension amount.
The OPS, which was replaced by the NPS in 2004, provided fully government-backed pensions with periodic dearness allowance revisions.
Last week, the Pension Fund Regulatory and Development Authority (PFRDA) officially notified the operationalisation of the UPS under NPS Regulations 2025.
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