New UPS offers choice between NPS and unified plan, set to launch April 1st
Cabinet approves Unified Pension Scheme, granting central government staff option between NPS and UPS. New plan promises 50% of final salary as minimum pension after 25 years.
NEW DELHI – The Cabinet has greenlit the Unified Pension Scheme (UPS), presenting central government employees with a choice between the existing NPS and the new UPS starting next fiscal year.
The introduction of the Unified Pension Scheme (UPS) marks a significant shift in pension policies for central government employees.
This new scheme, slated to commence on April 1st of the upcoming year, offers an alternative to the current National Pension System (NPS).
Key features of the UPS include:
1. Minimum pension assurance: Employees with at least 25 years of service are guaranteed a pension of no less than 50% of their average salary for the final 12 months before retirement.
2. Family pension provision: In the event of a pensioner’s death, their family will receive 60% of the pension amount.
3. Early exit clause: Employees leaving service after 10 years are entitled to a pension of ₹10,000.
4. Contribution structure:
– Employee contribution: 10% (similar to NPS)
– Government contribution: 18%
5. Additional benefits:
– Inflation indexation
– Gratuity upon retirement
– Accumulated sum separate from retirement benefits
6. Service-linked bonus: For every six months of service, employees accrue one-tenth of their monthly salary (including Dearness Allowance) as an additional retirement benefit.
"This new scheme aims to provide better financial security for our dedicated government employees," stated a senior official from the Ministry of Finance. "We believe the UPS strikes a balance between fiscal responsibility and employee welfare."
The introduction of UPS alongside the existing OPS (Old Pension Scheme) and NPS reflects the government’s efforts to address pension concerns while maintaining fiscal prudence.
As the implementation date approaches, government departments are gearing up to assist employees in making informed decisions about their pension options.
