Union govt launches Unified Pension Scheme

It enhances financial security of employees

It is et to take effect on April 1, 2025

The central government has introduced the Unified Pension Scheme (UPS), a new policy designed to provide enhanced financial security for government employees through an assured pension, family pension, and a guaranteed minimum pension. Set to take effect on April 1, 2025, the UPS aims to offer a pension equivalent to 50% of an employee’s average basic pay drawn over the last 12 months, provided they have completed at least 25 years of service. Employees with fewer than 25 years of service will receive a proportionate pension, with a minimum of 10 years required for eligibility.

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The scheme also ensures a family pension at 60% of the employee’s pension in the event of their death, offering crucial support to dependents. Additionally, the UPS guarantees a minimum pension of Rs 10,000 per month for retirees with at least 10 years of service, safeguarding them from inadequate retirement incomes.

Further benefits include a lump-sum payment at retirement, calculated as 1/10th of the last drawn monthly pay (including Dearness Allowance) for every six months of service, without reducing the assured pension. The pension will also be indexed to inflation, with adjustments based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), protecting retirees from rising living costs.

Past retirees under the National Pension System (NPS) will have the option to switch to the UPS, with arrears paid along with interest.