Unified Pension Scheme Notified: The Central Government has notified the Unified Pension Scheme (UPS). The Union Cabinet chaired by Prime Minister Narendra Modi has approved UPS on Saturday. The Central Government has offered the option of Unified Pension Scheme (UPS) to its government employees under the National Pension Scheme (NPS). This option has also been given for the states. UPS is a new scheme of the government. The government has announced that UPS will be available as an option under NPS for government employees. UPS has been notified by the government on January 24. UPS will be applicable to such central government employees who are covered under NPS. Existing Central Government employees can either choose the UPS option under NPS or continue with NPS without the UPS option. Meaning the new pension scheme is for those employees who are already in NPS. It has been created by combining the benefits of both Old Pension Scheme (OPS) and National Pension System (NPS). With this, employees will now get pension.
When was NPS implemented?
Atal Bihari Vajpayee government had brought NPS. UPS has been prepared by combining the benefits of Old Pension Scheme and NPS. It provides 50% of the last salary to government employees as pension. Employees will also get benefits like dearness allowance, family pension and lump sum payment. Employees covered under NPS will be given the option to choose UPS. There is a provision of benefits under UPS for retired employees also.
Advantages of UPS
UPS is very similar to the Old Pension Scheme. Under this scheme, on the death of the employee, 60% of the pension will be given to his family as family pension. Apart from gratuity, employees will also get a lump sum payment at the time of retirement. If an employee works in the Central Government for at least 10 years, he will get a minimum pension of Rs 10,000 per month.
But will not be able to make these claims
The notification clarifies that employees who opt for UPS will not be able to claim any other policy concession, policy change, financial benefit or any parity with employees retiring in future. Employees choosing UPS will have two parts in their retirement fund – an individual fund and a pool fund. There will be employee contribution and equal contribution from the government in the personal fund. There will be additional contribution of the government in the pool fund.
This notification will give 23 lakh government employees the option to choose between UPS and NPS. State governments will also be given the option to choose UPS. If the state government opts for UPS, the number of beneficiaries will be around 90 lakh. According to the government, Rs 800 crore will be spent on arrears. The annual cost overrun in the first year will be approximately Rs 6,250 crore. UPS will be implemented from April 1, 2025.
half pension of salary
Under the Unified Pension Scheme, employees working for 25 years or more will get the benefit of full pension. After retirement, every month half of their average salary for the last 12 months i.e. 50% will be given as pension. However, if an employee has worked for less than 25 years, he will be given pension accordingly. To get pension under this scheme, it is necessary to work for at least 10 years.
The government has also increased its contribution to the UPS Pension Fund. Earlier, 14 percent contribution was made by the government, but now under UPS, the government contribution has increased to 18.5 percent.
You will also get these benefits
Under UPS, the employee will also get the benefit of family pension. If a government employee dies during service or after retirement, then the husband or wife will be given pension, but the pension amount will be 60% of the pension being received by the employee. Government employees will also get the benefit of inflation indexation through the Unified Pension Scheme. This means that if inflation increases, retired employees as well as people availing family pension will get more pension.