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Unified Pension Scheme (UPS)
Context:
Recently, the Union Cabinet has approved the Unified Pension Scheme (UPS), which will provide government employees with assured pensions after retirement. The scheme will be effective from April 1, 2025.
About UPS:
According to the government’s notification, the Unified Pension Scheme (UPS) includes five key features:
- Assured Pension: Employees will receive a pension amounting to 50% of their average basic pay from the last 12 months before retirement, provided they have a minimum of 25 years of service.
- For shorter service periods, the pension will decrease proportionately, with a minimum requirement of 10 years of service.
- Assured Minimum Pension: Employees who retire after at least 10 years of service will be guaranteed a minimum pension of ₹10,000 per month.
- Assured Family Pension: In the event of a retiree’s death, their immediate family will receive 60% of the retiree’s last drawn pension.
- Inflation Indexation: Dearness relief will be applied to all three types of pensions, calculated using the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to how it is done for current employees.
- Lump Sum Payment at Superannuation: In addition to gratuity, retirees will receive a lump sum payment equal to 1/10th of their monthly emoluments (pay plus dearness allowance) at the time of retirement, for every six months of completed service.
Who is eligible for the UPS?
- It is available to all employees who retired under the National Pension System (NPS) from 2004 onwards.
- Employees will have the option to stay under the NPS, but the decision is irrevocable—once an employee opts for a scheme, the choice cannot be changed.
- Currently, the new scheme applies to central government employees, though states have the option to adopt it as well.
Difference between OPS and NPS:
