Unified Pension Scheme: 50% Assured Pension for Government Employees

The Centre has introduced a significant development for central government employees with the announcement of the Unified Pension Scheme (UPS), set to commence on April 1, 2025. This new pension scheme guarantees a robust pension system for government employees, ensuring financial stability post-retirement.

The UPS, approved by the Union Cabinet, promises a 50% assured pension of the average basic pay drawn during the last 12 months before retirement. This benefit is available to employees who have completed a minimum of 25 years of service. Employees with fewer years of service will receive a proportionate pension, ensuring fairness and inclusivity in the scheme.

Moreover, the scheme also introduces an assured family pension, which is 60% of the pension amount that the employee was receiving prior to their death. This ensures that the family members of the deceased employee continue to receive financial support.

The assured minimum pension under the UPS is set at Rs 10,000 per month for employees who retire after a minimum of 10 years of service. This provision is crucial for ensuring that even those with shorter tenures receive adequate post-retirement benefits.

Approximately 23 lakh central government employees are expected to benefit from this scheme, according to Railways Minister Ashwini Vaishnaw. The minister highlighted that the UPS provides a secure and predictable retirement benefit, enhancing the financial security of government employees.

Another noteworthy feature of the UPS is that employees will have the option to choose between the National Pension System (NPS) and the new UPS. This flexibility allows employees to select a pension plan that best suits their individual needs.

Additionally, the scheme includes a lump-sum payment at the time of superannuation, in addition to gratuity and one-tenth of the monthly emoluments (pay + Dearness Allowance) on the date of superannuation for every completed six months of service. Importantly, this lump-sum payment will not affect the quantum of the assured pension, ensuring that employees receive their full entitled benefits.

The introduction of the Unified Pension Scheme represents a significant step forward in ensuring the financial well-being of government employees post-retirement. With its assured pension, family pension, and minimum pension guarantees, the UPS is set to become a cornerstone of the government’s social security system.

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