Unified Pension Scheme for Government Employees: The central government has announced the Unified Pension Scheme (UPS). This is a new option for central government employees under the National Pension System (NPS). Under the UPS, the fixed pension will be given after retirement, while the pension amount in NPS depends on the performance of the market. Under UPS, a minimum of Rs 10,000 is guaranteed.
It will be applicable from 1 April 2025
UPS i.e. Unified Pension Scheme will be applicable from 1 April 2025. If an employee chooses UPS leaving NPS, he cannot return to NPS again. The benefit of this scheme will be given to those employees who are included in the NPS under the Central Government.
How will the calculation of pension be?
Under the UPS, the calculation of pension will be done under the formula mentioned below.
Pension = 50% × (Total of basic salary of last 12 months / 12)
If the service is 25 years or more, then you will get full pension.
If the service is less than 25 years, pension will be reduced in the same proportion.
Understand by example
Example 1: Complete pension (25+ year service)
If the average basic salary of an employee is Rs 1,00,000, then there will be pension.
50% × 1,00,000 = 50,000 rupees monthly
Example 2: Low service period (less than 25 years)
If an employee has done 20 years of service and his average basic salary is Rs 1,00,000, then
50% × 1,00,000 × (20/25) = Rs 40,000 monthly
Example 3: Minimum Guarantee Pension
If someone’s basic salary is Rs 15,000, then pension is made from formula Rs 7,500. However, since there is a minimum guarantee of Rs 10,000, he will get a monthly pension of Rs 10,000. The UPS will benefit the central government employees stable and guaranteed pension. This will be especially beneficial for employees who want to avoid market -based risk.
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