Unified Pension Scheme (UPS) explained in 10 points

The scheme will benefit 23 lakh central government employees.

The Union Cabinet, led by Prime Minister Narendra Modi, approved the Unified Pension Scheme (UPS) for government employees, a significant move that promises an assured pension for the country’s central government workforce.

To qualify for this, employees must have a minimum of 25 years of service. The scheme will benefit 23 lakh central government employees.

"We are proud of the hard work of all government employees who contribute significantly to national progress. The Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future," PM Modi said in a post on X.

Also Read | Unified pension scheme offers benefits of OPS with contributory NPS scheme

To understand the scheme better, Union Minister Ashwini Vaishnaw took to X, to explain it in 10 simple points.

1. Assured Pension: Retirees will now receive 50 percent of their average basic pay over the last 12 months before retirement as a pension for a minimum qualifying service of 25 years. Proportionate for lesser service period upto a minimum of 10 years of service.
2. Government Contribution: The Government is increasing its contribution from 14 percent to 18.5 percent. Employee contribution will not increase.
3. Assured Family Pension: In case of a pensioner’s unfortunate demise, their family will receive 60% of the pension the employee was receiving.
4. Assured Minimum Pension: Rs 10,000 per month as pension, on superannuation after minimum 10 years of service.
5. Inflation Protection: Pensions will be indexed to inflation. Dearness Relief will be based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), as in case of serving employees
6. Lump-Sum Payment: Lump-Sum Payment  at superannuation in addition to gratuity. 1/10 th of monthly emoluments ( pay +DA) as on the date of superannuation for every completed six months of the service. This Payment will not reduce the quantum of assured pension.
7. UPS Provisions: Provisions of UPS will apply to past retirees of NPS (who have already superannuated). Arrears for past period will be paid with interest at PPF rates.
8. UPS as an Option: UPS will be available as an option to the employees. Existing NPS / VRS with NPS as well as future employees will have an option of joining UPS. Choice, once exercised, will be final.
9. UPS is being implemented by the Central Government. Benefiting 23 lakh Central Government employees.
10. The same architecture has been designed for adoption by State Governments. If also adopted by State Governments, can benefit over 90 lakh Government employees who are presently on NPS.