Unified Pension Scheme: Ahead of the crucial assembly elections in Haryana and Jammu and Kashmir, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved the Unified Pension Scheme (UPS).
The UPS scheme, which will be effective from April 1, 2025, is set to benefit around 23 lakh Central government employees.
The pension scheme is designed to provide financial security to central government employees post-retirement, ensuring both an assured pension and family pension. It also has provisions of assured pension for the family members of the employee in case of his/her demise.
Below are the key features of the Unified Pension Scheme or UPS:
1. Assured Pension: The Central government employees will receive 50 per cent of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pension is proportionate for shorter service periods, down to a minimum of 10 years of service.
2. Assured Family Pension: In case of an employee’s demise, his/her family would get 60 per cent of the pension amount received by the employee immediately before their demise.
3. Assured Minimum Pension: Rs 10,000 per month pension will be given on superannuation after completing a minimum of 10 years of service.
4. Inflation Indexation: The UPS will also have a provision for inflation indexation. As per this, the assured pension, family pension, and minimum pension will be adjusted for inflation, following the Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to adjustments for serving employees.
5. Lump Sum Payment at Superannuation: In addition to gratuity, a lump sum payment equivalent to 1/10th of monthly emoluments (Pay + DA) as on the date of superannuation for every completed six months of service. This payment will not reduce the amount of assured pension.