Introduced by the central government as a substitute for the National Pension System (NPS), the Unified Pension Scheme (UPS) will become operative on April 1, the government said earlier this year.
For those qualified central government workers already registered in the NPS, UPS will be accessible as a choice.
UPS benefits and eligibility
A persistent demand by government staff for the reinstatement of the Old Pension Scheme (OPS), which guaranteed retirees 50% of their final wage as a pension, brought the UPS in.
Government workers will pay 10% of their base pay under the UPS and the dearness allowance (DA); the government’s contribution will rise to 18.5% from 14%.
The government would also fund a second pooled fund, supported by an additional 8.5% contribution.
The UPS program thus provides participants with a pension equal to half of the average basic pay from the past twelve months.
However, this benefit is offered only to government employees who have completed at least 25 years of service. Workers serving ten to twenty-five years will get a prorated pension.
Should a government employee pass away tragically, their family members will receive sixty percent of the pension.
IThe employee also receives superannuation benefits, as they receive a lump sum payout at retirement and a gratuity.
Minimum ten-year service employees will get a monthly pension of at least ₹10,000.
Employees who leave voluntarily after at least 25 years of service will also be eligible for pension benefits starting at their expected superannuation age.
The system also benefits former NPS retirees who retired before the UPS’s adoption.
Arrears for the previous period will be given to them together with interest computed using Public Provident Fund rates.
