The union approved new Unified Pension Scheme,prime minister chaired the meeting.As of now this scheme is for central government employees.It is understood that currently there are 23 lakh such employees.In 2023, the finance ministry set up a committee led by finance secretary TV Somanathan to review the existing pension scheme, – NPS – for government employees
The National Pension System (NPS)is applicable for all government employees who joined the service after April 1, 2004. NPS subscribers can choose to shift to the Unified Pension Scheme, which offers assured pension, minimum pension and assured family pension from the next financial year
Salient features of the Unified Pension Scheme
Assured pension
50% of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service period upto a minimum of 10 years of service
Assured family pension
in the event of death of employee, the family will get 60% of the pension of the employee immediately before her/his demise.It is also proposed Assured minimum pension: @10,000 per month on superannuation after minimum 10 years of service.
It is proposed that inflation indexation on assured pensions, assured family pensions, and assured minimum pensions will be applicable.It means that, with inflation, the amount of pension will increase.
Additional Benefits in Unified Pension Scheme
In addition to pension, there is provision of lump sum payments at superannuation in addition to gratuity in this new unified pension scheme. 1/10th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service.This payment will not reduce the quantum of the assured pension.
Eligibility for Unified Pension Scheme
The National Pension System (NPS) is applicable for all government employees who joined the service after April 1, 2004. NPS subscribers can choose to shift to the Unified Pension Scheme, which offers an assured pension, a minimum pension, and an assured family pension from the next financial year.
All those who are retired or retiring up till March 31, 2025, with arrears, are eligible. The new scheme will be implemented from April 1, 2025 and employees will have the option to choose between the NPS or UPS.But once the option is exercised, ,it can not be undone.
Guaranteed fixed pension amount
The people who have opted for the National Pension Scheme would be eligible for the Unified Pension Scheme (UPS) from the next financial year. The UPS provides an assured pension, which is 50% of the salary for those who joined the service after January 1, 2004. However, NPS is a market-linked defined contribution scheme. Since the money from NPS is invested in the market, the pension amount is not fixed and is subject to fluctuation based on market conditions
Contribution in Unified Pension Scheme
The NPS requires a 10-per cent contribution from the employee’s basic salary, matched by a 14 per cent contribution from the government. In the case of the new Unified Pension Scheme, the government’s contribution to the UPS will increase to 18.5% against 14% currently. Whereas, the employees will continue to contribute 10% of their basic pay and DA
Are private employees eligible for UPS or NPS?
The UPS has been launched for government employees who have opted for the NPS. Meanwhile, the old NPS is available for private employees if their employer has adopted the contribution. If not, any Indian citizen (between the ages of 18 and 70) can voluntarily opt for the NPS
UPS will also apply for all those government employees who have already retired under National Pension System (NPS) from 2004 onwards. “ Though new UPS will take effect from April 1, 2025, everybody who has retired from the time of inception of NPS and also including those retiring till March 31, 2025 will also be eligible for all five benefits under UPS.They will get arrears after adjusting for whatever they have drawn. Arrears will be paid with interest at PPF rates
