The central government has introduced the option of Uniform Pension Scheme (UPS) for its employees under the National Pension System (NPS). In this scheme, employees get assured payment after retirement. This means that their pension will not depend on the performance of the stock market and date market. Here, NPS is a market linked pension scheme, in which the pension of the employee depends on the performance of the stock market and the date market. UPS is assured at least Rs 10,000 every month.
The UPS will be implemented from April 1, 2025. If the employees under NPS select the UPS once, then they will not have the option to use NPS again. There is a formula to calculate pension in UPS. With this formula, a person can calculate his pension.
50% of payout = X (12 -month basic pay joint/12)
This formula can be used only when the employee’s service is left 25 years or more years. If the service is left less than 25 years, then the payout will be in proportion to it. If the employee takes voluntary retirement after 25 years of service, the payaout will start from the original date of retirement.
This can be understood with the help of an example. One of the three types of conditions with the employee can be a situation. In the first situation, suppose the service of the employee is 25 years or more. In this situation, suppose the average of the employee is Rs 12,00,000 at the time of retirement. According to the formula, this amount will have to be divided from 12. The average of 12-Mahin will be Rs 1,00,000. It has to be multiplied by 50 percent. In this way the employee will get a pension of Rs 50,000.
In the second situation, the service of the employee is less than 25 years. Suppose the employee works for 20 years. Then he retires. So the perpochetical factor will be 20/25 = 0.8. In such a situation, the calculation of payout will be like this. 50% x 1,00,000 x 0.8 = 40,000
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The third position is of minimum guratidal payout. Suppose an employee’s basic pay is Rs 15,000 at the time of retirement, then its payout will be Rs 7,500, which will be less than the minimum assord amount. In such a situation, his final pay will be Rs 10,000.