The Key Features of Unified Pension Scheme
About 23 lakh central government employees are likely to benefit from the newly launched Consolidated Pension Scheme (UPS).
The Cabinet, chaired by prime minister Narendra Modi, has approved spending of Rs 800 crore towards dues, while the annual expenditure increase is expected to be approximately Rs 6,250 crore in the first year. The UPS scheme is set to come into effect from april 1, 2025. The newly launched UPS will be an alternative to the popular National Pension Scheme (NPS). New central government employees will have the option of opting between NPS and UPS. NPS subscribers, who are existing government employees, will also get the option to switch to UPS.
The Cabinet, chaired by prime minister Narendra Modi, has approved spending of Rs 800 crore towards dues, while the annual expenditure increase is expected to be approximately Rs 6,250 crore in the first year. The UPS scheme is set to come into effect from april 1, 2025. The newly launched UPS will be an alternative to the popular National Pension Scheme (NPS). New central government employees will have the option of opting between NPS and UPS. NPS subscribers, who are existing government employees, will also get the option to switch to UPS.
On the launch of UPS, PM Modi said in his X post that the Consolidated Pension Scheme ensures dignity and financial security for government employees, is in line with our commitment to their well-being and secure future. UPS will come into force after two decades of NPS, which was launched on january 1, 2004. Apart from the armed forces, government employees on or after april 1, 2004, are eligible for NPS. Notably, NPS is a market-linked limited contribution scheme that helps you save for retirement.
According to Information Broadcasting and Railways minister Ashwini Vaishnav, the UPS comes after several concerns raised by civil servants who have demanded several changes. Therefore, a committee constituted by PM Modi conducted a thorough inquiry that included 100 meetings with various organisations in the country and almost all the states.
Vaishnaw revealed that the government had taken inputs from a wide range of stakeholders, including the RBI and the World Bank. Based on recommendations and detailed suggestions, the committee came up with the Consolidated Pension Scheme (UPS). He said UPS has been introduced to address the problems data-faced by civil servants and revamp the pension system for improved efficiency and efficiency.
The key features of UPS
The scheme ensures that those who have worked for at least 25 years will receive 50% of their salary drawn in the last 12 months as pension, before retirement. In case of death of a government servant, 60% of his pension will be paid to the family.
Government employees who have completed a minimum of 10 years of service will be paid Rs 10,000 per month after retirement. As per the existing pension scheme, employees must contribute 10%. The government's contribution is 14 per cent. government contribution to the existing UPS-Integrated Pension Scheme has been increased to 18.
1 /10th of the monthly salary (wage + DA) as on the date of retirement for each completed six months of service, this allowance does not reduce the amount of the Assured Pension.