Unified Pension Scheme: Key Features and Impacts for Government Employees
What is Unified Pension Scheme?
The Unified Pension Scheme (UPS) is designed to deliver assured pension benefits to government employees in India. Launched by the Modi government, the scheme answers the long-standing demands for reform in the New Pension Scheme (NPS). The UPS aims to provide reliable financial security post-retirement, ensuring that all eligible employees benefit directly from the pension.
UPS Features
- Assured Pension: Employees can expect a pension amounting to 50% of their average basic pay over the last 12 months before retirement.
- Assured Family Pension: Protects the financial future of dependents by providing 60% of the pension in case of the employee's passing.
- Assured Minimum Pension: A monthly pension of Rs 10,000 is guaranteed for employees with at least ten years of service.
- Inflation Indexation: Pension values are adjusted for inflation to maintain purchasing power.
- Lump Sum Payment: Along with gratuity, a lump sum amount is provided that does not affect the assured pension calculation.
Furthermore, employees have the choice between securing their future through the UPS or continuing under the NPS. This significant shift is effective from April 1, 2025, and will impact all government retirees until that date with corresponding arrears.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.