Unified Pension Scheme: The Central Government has announced the implementation of Unified Pension Scheme (UPS) for government employees under the National Pension System (NPS). The scheme will be applicable from 1 April 2025. The purpose of the scheme is to provide more secure pension service to the employees. According to the notification issued by the government, once the employee selects the option of UPS, he will not be able to return to the NPS. This scheme can be implemented not only for the central government employees, but also the state governments if they want to their employees.
Pension and advantages
Under the Unified Pension Scheme, the average of the last 12 months before retirement will be available as 50% pension of the basic salary, provided the employee has completed a minimum 25 -year service. If the employee has served between 10 and 25 years, a minimum of Rs 10,000 will be given a monthly pension. Employees taking voluntary retirement, who have completed 25 years of service, will start getting this pension from the same age at which they would take general retirement. If the pensioner dies, the family will get 60% of the pension.
Relief will be given from inflation
The government has clarified that pension, family pension and minimum pension will be linked with dearness relief. This will benefit that pensioners will not affect inflation.
Money will be available together on retirement
At the time of retirement, employees will also get an additional amount in addition to gratuity. This amount will be 1/10th of basic salary and dearness allowance at the complete service of every six months. This lump sum amount will not affect the pension.
Pension funds and contribution
Two funds will be built under unified pension scheme
Individual corpus (Individual Corpus): Employees and central government will contribute equally in this.
Pool corpus (Pool Corpus): The government will contribute additional to this. Employees will have to contribute 10% of the basic salary + dearness allowance (DA), which the government will deposit in equal proportion. In addition, the government will contribute additional 8.5% to the pool fund.
Investment option
Employees will have the freedom to choose investment options for their personal funds. If an employee does not choose the option, the fixed default investment scheme of the Pension Fund Regulatory and Development Authority (PFRDA) will be implemented.