What is Unified Pension Scheme (UPS) and Benefits & Features

The Union Cabinet, led by Prime Minister Narendra Modi, has approved the Unified Pension Scheme (UPS), designed to provide government employees with a guaranteed pension, a family pension, and a minimum pension.

The government has introduced the UPS pension scheme, despite opposition from several non-BJP-ruled states concerning the New Pension Scheme (NPS). Union Minister Ashwini Vaishnaw stated that the scheme will benefit 2.3 million central government employees. Starting April 1, 2025, employees will be able to choose between continuing with the NPS or switching to the new UPS.

What is the Unified Pension Scheme (UPS)

The Unified Pension Scheme (UPS) is a new pension program approved by the Union Cabinet and led by Prime Minister Narendra Modi. It is designed to provide government employees with:

• Assured Pension: 50% of their average basic salary from the last 12 months before retirement, if they have at least 25 years of service.
• Family Pension: 60% of the pension amount to the employee’s family in case of the employee’s death.
• Minimum Pension: ₹10,000 per month after retirement for those with a minimum of 10 years of service.

The UPS scheme will be implemented from April 1, 2025, and employees will have the option to choose between the UPS and the existing National Pension Scheme (NPS).

Key Features of the Unified Pension Scheme

• Guaranteed Pension: The scheme ensures that government employees receive a monthly pension for life, amounting to 50% of their last drawn salary.
• Dearness Relief: The pension amount is periodically adjusted with a dearness relief increase to keep up with inflation.
• Family Pension: If a government employee passes away, their family is entitled to receive a pension that is 60% of what the employee would have received.
• Superannuation Payout: At retirement, employees are provided with a lump sum payment in addition to their gratuity benefits.
• Minimum Pension: A minimum monthly pension of ₹10,000 is guaranteed for those who have completed at least 10 years of service with the central government.

Here are the key points from the announcement of the Unified Pension Scheme (UPS)

1. Approval and Implementation of the UPS Scheme

• The UPS was approved by the Union Cabinet, chaired by Prime Minister Narendra Modi.
• The scheme will be implemented from April 1, 2025.

2. Benefits of Unified Pension Scheme

• Assured Pension: Government employees will receive 50% of their average basic salary from the last 12 months before retirement, provided they have completed at least 25 years of service.
• Family Pension: In case of death, the family will receive 60% of the pension amount.
• Minimum Pension: Employees will receive ₹10,000 per month after retirement if they have completed a minimum of 10 years of service.

3. Contribution Rates

• Under the current scheme, employees contribute 10% and the government contributes 14%. With the UPS, the government contribution will increase to 18%.

4. Options for Employees

• Employees will have the choice to either stay with the existing National Pension Scheme (NPS) or switch to the new UPS.

5. Political Context:

• The launch comes ahead of state and Union Territory assembly elections, amid protests from non-BJP-ruled states over the NPS.

Watching this Video for More Information: Unified Pension Scheme (UPS) vs Old Pension Scheme (OPS)

Key Points

The UPS was approved by the Union Cabinet, chaired by Prime Minister Narendra Modi.

The scheme will be implemented from April 1, 2025.

Government employees will receive 50% of their average basic salary from the last 12 months before retirement, if they have completed at least 25 years of service.

In case of death, the family will receive 60% of the pension amount.

Employees will receive ₹10,000 per month after retirement, if they have completed a minimum of 10 years of service.

The government contribution will increase to 18%, up from the current 14%.

Employees can choose to stay with the National Pension Scheme (NPS) or switch to the UPS.

The announcement was made ahead of state and Union Territory assembly elections, amid protests from non-BJP-ruled states over the NPS.