The Centre has announced the implementation of the Unified Pension Scheme (UPS) for Central Government employees already enrolled in the National Pension System (NPS). The scheme, which combines elements of both the Old Pension Scheme (OPS) and NPS, aims to offer retirees a guaranteed pension, ensuring financial security and dignity post-retirement. The UPS will come into effect from April 1, 2025.
According to a government notification issued on January 24, 2025, the UPS will be available to eligible employees under specific conditions. The scheme promises an assured payout in the following cases:
Superannuation: Employees who retire after completing a minimum of ten years of qualifying service will receive the assured payout from the date of superannuation.
Retirement under FR 56(j): Employees retired by the government, not under penalty provisions, will be eligible for the payout from the date of retirement.
Voluntary Retirement: Employees opting for voluntary retirement after at least 25 years of service will receive the payout from the date they would have superannuated.
The scheme, however, will not apply to employees who are dismissed, removed, or resign from service, in which case the UPS option will not be available.
Payout Calculation and Benefits:
Full Assured Payout: Employees with 25 or more years of qualifying service will receive 50 percent of their average basic pay over the last 12 months prior to superannuation as the full assured payout.
Proportional Payout: Employees with less than 25 years of service will receive a proportional payout.
Minimum Guaranteed Payout: A minimum payout of Rs. 10,000 per month is assured for employees with ten or more years of qualifying service.
For employees retiring voluntarily after 25 years of service, the assured payout will begin from the date they would have reached superannuation had they continued in service.
Family Payout in Case of Death:
In the event of the payout holder’s death after superannuation, a family payout will be made at 60 percent of the last admissible payout. This payout will be provided to the legally wedded spouse of the deceased, as per the date of superannuation, voluntary retirement, or retirement under FR 56(j).
Dearness Relief:
Dearness Relief will be applicable on the assured payout and family payout, similar to the Dearness Allowance for serving employees. The relief will only be provided once the payout commences.
Additionally, a lump sum payment of 10 percent of the monthly emoluments (basic pay + Dearness Allowance) will be granted for every six completed months of qualifying service at the time of superannuation. This lump sum will not affect the assured payout.
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