Government Approves Unified Pension Scheme

On 24th August, 2024, the government approved the Unified Pension Scheme (UPS), guaranteeing 50% of the base salary as a pension for federal government employees.

Key Points

Guaranteed Pension: The UPS ensures that employees will receive 50% of their average basic pay from the last 12 months as a pension, provided they have a minimum of 25 years of service.
Minimum Pension Assurance: The scheme guarantees a minimum pension of ₹10,000 per month for those with at least 10 years of service upon retirement.
Family Pension: In the event of an employee's death, their spouse is assured a family pension under the new scheme.
Inflation Indexation: Pensions under UPS, including the minimum and family pensions, will be indexed to inflation.
Dearness Relief: Retirees will receive dearness relief based on the All India Consumer Price Index for Industrial Workers, similar to current employees.
Retirement Lump Sum: In addition to gratuity, retirees will receive a lump sum equivalent to 1/10th of their monthly emolument for every six months of service completed.
Eligibility: The UPS will be implemented from April 1, 2025, and is expected to benefit 23 lakh employees, with the potential to expand to 90 lakh if state employees join the scheme. Existing Central government employees under the National Pension Scheme (NPS) can opt for UPS.