The Government of India has announced Unified Pension Scheme (UPS), which will be applicable from 1 April 2025. The scheme has been introduced as an alternative option for central government employees under the National Pension System (NPS). The objective of this scheme is to provide financial security to government employees after retirement. Unified Pension Scheme has many attractive features that make it different from other pension schemes.
Under this scheme, employees will get 50% pension of the average basic pay of the last 12 months of their service, provided they have completed at least 25 years of service. If an employee completes 10 to 25 years of service, he will get pension in the ratio of their service years. Apart from this, employees whose service is more than 10 years but below 25 years will get a minimum pension of Rs 10,000 per month.
Unified Pension Scheme overview
The following are detailed information of Unified Pension Scheme:
| Speciality | Description |
| Applied date | 1 April 2025 |
| Eligibility | Central government employees under NPS |
| Pension calculation | 50% of the last 12 months average basic pay |
| Minimum pension | 10,000 rupees per month (service of 10 to 25 years) |
| Family pension | 60% pension on pensioner’s death |
| Lump equal payment | Lump sum payments on retirement |
| service required | Service of at least 25 years |
Key features of pension scheme
Unified Pension Scheme has many important features that make it different from other pension schemes:
- Guaranteed Pension: Under this scheme, employees will get 50% pension of the last 12 months of their service, provided they have completed at least 25 years of service.
- Minimum pension: Employees whose service is more than 10 years but less than 25 years, will get a minimum pension of Rs 10,000 per month.
- Family Pension: On the death of the pensioner, his family will get 60% pension.
- Lump Sama Payment: Employees will also get lump sum payment on retirement.
- Inflation index: Pension will be adjusted according to All India Consumer Price Index for Industrial Workers (AicPI-IW).
Contribution to employees
Employees will have to contribute 10% of their basic pay and dearness allowance (DA) in Unified Pension Scheme. The government’s contribution will be 18.5%, out of which 8.5% will go to a pool corpus which will be used for guaranteed pension.
Benefits of pension scheme
There are many benefits of Unified Pension Scheme that make it attractive to government employees:
- Financial Security: Provides financial security after retirement.
- Guaranteed Pension: Guarantees fixed pension.
- Family security: On the death of the pensioner, the family also gets pension.
- Lump Sama Payment: Lump sum payment is received on retirement.
Operation of pension scheme
The operation of Unified Pension Scheme will be controlled by Pension Fund Regulatory and Development Authority (PFRDA). Employees will have the freedom to choose investment options for their individual corpus. If they do not choose an alternative, the default investment pattern will apply.
Future of pension scheme
The future of Unified Pension Scheme is very promising. The scheme will help government employees provide financial security after retirement. Apart from this, this scheme will also be available to the state governments, so that they will be able to implement it for their employees.
conclusion
Unified Pension Scheme is an important step that will provide financial security to government employees after retirement. Its characteristics and benefits make it different from other pension schemes. This scheme can be a good option not only for central government employees but also for state governments.
Disclaimer: This article provides information about Unified Pension Scheme, which is going to be implemented from 1 April 2025. The scheme is real and has been announced by the government. However, there may be future changes in the details and benefits of the plan.
