Unified Pension Scheme: The central government has announced the implementation of the Unified Pension Scheme (UPS) for government employees covered under the National Pension System (NPS). This scheme will come into effect from April 1, 2025. The aim of the scheme is to provide more secure pension service to the employees.
Unified Pension Scheme : The central government has announced the implementation of the Unified Pension Scheme (UPS) for government employees covered under the National Pension System (NPS). This scheme will come into effect from April 1, 2025. The aim of the scheme is to provide more secure pension service to the employees. According to the notification issued by the government, once an employee chooses the UPS option, he will not be able to go back to NPS. This scheme is not only for central government employees, but state governments can also implement it for their employees if they want.
Pension and benefits
Under the Unified Pension Scheme, 50% of the average basic salary of the last 12 months before retirement will be given as pension, provided the employee has completed a minimum of 25 years of service. If the employee has served between 10 to 25 years, a minimum monthly pension of Rs 10,000 will be given. Employees taking voluntary retirement, who have completed 25 years of service, will start getting this pension from the same age at which they would have taken normal retirement. If the pensioner dies, the family will get 60% of the pension.
There will be relief from inflation
The government has clarified that pension, family pension and minimum pension will be linked to Dearness Relief. This will have the advantage that inflation will not affect pensioners.
You will get money together on retirement
At the time of retirement, employees will get an additional amount in addition to gratuity. This amount will be 1/10th of the basic salary and dearness allowance for every six months of completed service. This lump sum amount will not have any impact on the pension.
Pension funds and contributions
Two funds will be created under the Unified Pension Scheme
- Individual Corpus : In this, there will be equal contribution of the employee and the Central Government.
- Pool Corpus : The government will make an additional contribution in this. Employees will have to contribute 10% of their basic salary + dearness allowance (DA), which will be deposited by the government in equal proportion. Apart from this, the government will contribute an additional 8.5% to the pool fund.
Investment Options
Employees will have the freedom to choose the investment option for their personal fund. If an employee does not choose the option, the default investment plan prescribed by the Pension Fund Regulatory and Development Authority (PFRDA) will apply.
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