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Government Notifies Unified Pension Scheme

  • 27 Jan 2025

On 25th January 2025, the finance ministry announced the operationalization of the Unified Pension Scheme (UPS) under the National Pension System (NPS), effective April 1, 2025.

Key Points

  • Scope of UPS: Central government employees under NPS can opt for UPS, guaranteeing retirement benefits.
  • Pension Benefits: Employees with 25+ years of service will receive 50% of their average basic pay (last 12 months). Proportionate pensions are available for those with 10–25 years of service.
  • Regulatory Oversight: PFRDA will issue regulations for the scheme's implementation.
  • Policy Framework: UPS responds to demands for guaranteed retirement benefits and addresses grievances regarding NPS.
  • Historical Context: Approved by the union cabinet on 24th August 2024, the scheme follows recommendations from a high-level committee led by T.V. Somanathan.
  • Political Relevance: The scheme aims to address criticism of NPS and counter states reverting to the financially burdensome Old Pension Scheme (OPS).