Unified Pension Scheme: The central government has notified the Unified Pension Scheme (UPS) as an option under the National Pension Scheme (NPS). Now central government employees can choose their preferred pension scheme from NPS or UPS. UPS has been announced after a long-standing demand of the employees
Unified Pension Scheme: The central government has notified the Unified Pension Scheme (UPS) as an option under the National Pension Scheme (NPS). Now central government employees can choose their preferred pension scheme from NPS or UPS. UPS has been announced after a long-standing demand of the employees, which demanded the restoration of the old pension scheme. Under OPS, 50% of the last salary was given as pension after retirement.
Will everyone get 50% pension under UPS?
According to the UPS notification issued on 24 January 2025, employees will have to fulfill several conditions and rules to get 50% pension of the last salary after retirement. A formula has been fixed for the calculation of correct pension under UPS.
Pension = (P/2) x (Q/300) x (IC/BC)
- P: Average of average basic pay of last 12 months
- Q: Total number of months spent in the job (if more than 300, it will be considered as 300)
- IC: Personal Corpus (Retirement Fund)
- BC: Benchmark Corpus
Which employees will get 50 percent pension
According to experts, only those employees whose salary increment starts on January 1 and retires on December 31. Or get salary hike on July 1 and service ends on June 30, they will get 50% of their last salary as pension. Apart from this, they will also have to fulfill some conditions.
- Employees will have to complete 25 years of their service.
- Their personal corpus should be equal to the benchmark corpus (BC) set by the government.
- The average salary of the last 12 months should be equal to their last salary.
UPS vs OPS
Under UPS, the pension will be calculated on the basis of the average basic pay of the last 12 months. In OPS, it was decided on the basis of the last salary. This difference can affect the amount of pension for many employees.
VRS provisions
According to the notification, after retirement after at least 25 years of service, the fixed pension will start from the date on which he retired. For example, if an employee starts a job at the age of 21 and takes VRS at the age of 46 after 25 years of service, then he will get the fixed pension after the age of 60.
Where will you get information about UPS?
Complete information and notification related to UPS can be downloaded in PDF format. The aim of this scheme is to provide better pension options to the employees. But for this, it is mandatory to fulfill the prescribed conditions.
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