Unified pension scheme: The Finance Ministry notified the Unified Pension Scheme (UPS) on 25 January. Under this scheme, 50%of the average basic pay achieved in the last 12 months before retirement has been promised to be given as full assord pension after retirement. According to the Gazette notification issued by the Finance Ministry, the UPS will apply to the Central Government employees who come under the National Pension System (NPS) and who opt for it under the NPS. UPS is scheduled to come into force from 1 April 2025.
According to the notification, the assured pension will not be available in the event of the employee being removed or dismissed from the service. It has been said that the rate of full assured payment will be 50% of the 12 -month average basic pay just before retirement. But for this, it is necessary to have a minimum of 25 years service of the employee. The NPS is linked to payouts, market returns.
UPS or NPS: Employees will have option to choose
The notification issued by the government will give 23 lakh government employees the option to choose between UPS and NPS. The existing central employees under NPS, as well as the Central Government’s Future Employees UPS, can select UPS option under NPS on the date of the implementation of UPS, or can go with NPS without UPS. If an employee under NPS, who is in service on the date of implementation of UPS and uses the UPS option, will be transferred to the employee’s personal fund under the employee’s Permanent Retirement Account Number. NPS in the country came into force on 1 January 2004.
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Government will increase contribution in pension
The UPS will increase the government’s contribution to the pension of the central government employees from the current 14% to 18.5%. At the same time, employees will have to put 10% of their basic salary and dearness allowance in UPS. The UPS was approved by the Union Cabinet on 24 August 2024. In the case of the employee’s minimum service being less than 25 years, there will be pension under UPS but a little less. If the service of the employee is 10 years or more, then the minimum pension of Rs 10,000 will be guaranteed every month.
What is the rule in the case of volunteer retirement and death
Under the UPS, the minimum 25 -year qualifying service period in matters of voluntary retirement, the pension assord payout will begin on the date on which the employee retires. But only when his service is continuing. The notification states that if the benefits die after retirement, then the family pension will be legally married to the married spouse at the rate of 60% of the payout approved just before his death.
Inflation will be available on relief ie Dearness Relief, Assord Pension or Family Pension. Calculation of inflation relief will be done in the same way as it is done for dearness allowance applied for serving employees.