23 Lakh Government Employees Will Benefit From UPS

In a big announcement ahead of assembly elections in one state and a Union Territory this year, the government has launched the Unified Pension Scheme (UPS) amid protests by several non-BJP-ruled states over the New Pension Scheme (NPS).

Benefit for 23 lakh central government employees

“This scheme will benefit 23 lakh central government employees (under the National Pension Scheme),” announced Union Information and Broadcasting Minister Ashwini Vaishnaw. The new scheme will be implemented from April 1, 2025 and employees will have the option to choose between the NPS or UPS.

Approved by Union Cabinet

The UPS, approved by the Union Cabinet chaired by Prime Minister Narendra Modi, aims to give assured pension, family pension and assured minimum pension to government employees:

About this scheme

• Assured Pension: The scheme assures 50 percent of the average basic salary for the last 12 months before retirement as the pension for government employees who complete a minimum of 25 years in service.
• It will be proportionate for a shorter service period up to a minimum of 10 years of service.
• Assured Family Pension: In case of death, the family will get 60 percent of the last-drawn amount by the pensioner.
• Assured Minimum Pension: The scheme also assures ₹ 10,000 per month after retirement for government employees after minimum 10 years of service.

Current pension scheme

As per the current pension scheme, employees contribute 10 per cent while the central government contributes 14 percent, which would be increased to 18.5 percent with the UPS.

Ensures dignity and financial security

“The Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future,” he added.

Review the pension scheme

Last year, a committee under Finance Secretary TV Somanathan was set up to review the pension scheme for government employees and suggest changes in the light of the existing framework and structure of the National Pension System.

Benefits of OPS

Under the OPS, retired government employees received 50 per cent of their last-drawn salary as monthly pensions. The amount keeps increasing with the hike in the Dearness Allowance (DA) rates.