Unified Pension Scheme (UPS): Salient Features, Eligibility And Minimum Pension Amount

The Unified Pension Scheme is a significant step towards ensuring financial security for all citizens in their retirement years. To streamline various pension schemes under one umbrella, the government has introduced this scheme to provide a comprehensive and sustainable pension system. This article delves into the salient features of the Unified Pension Scheme, the eligibility criteria, and the minimum pension amount it guarantees.

The Central Government has introduced the Unified Pension Scheme (UPS) for its employees, set to take effect from April 2025. Under this new scheme, employees will receive a fixed pension amount, equivalent to 50% of their average salary from the preceding 12 months, after completing 25 years of service. The scheme is designed to benefit 23 lakh central government employees.

What Is The Unified Pension Scheme (UPS)?

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the Unified Pension Scheme (UPS) on August 24, 2024. The Unified Pension Scheme guarantees a pension to employees who have completed at least 25 years of service and provides a proportional pension or a minimum of ₹10,000 per month for those with a minimum of 10 years of service. Additionally, retirees will benefit from inflation-linked increases in their pension amount after retirement.

Unified Pension Scheme (UPS) Salient Features:

Here are the salient features of the new Unified Pension Scheme (UPS) as per PM India website:

i) “Assured pension: 50% of the average basic pay drawn over the last 12 months before superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service periods up to a minimum of 10 years of service.

ii) Assured family pension: @60% of the pension of the employee immediately before her/his demise.

iii) Assured minimum pension: @10,000 per month on superannuation after a minimum of 10 years of service.

iv) Inflation indexation: on assured pension, on assured family pension and assured minimum pension

Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) as in the case of service employees

v) lump sum payment at superannuation in addition to gratuity 1/10th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service.”

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Unified Pension Scheme (UPS) Eligibility:

As stated by Union Information and Broadcasting Minister Ashwini Vaishnaw, employees who have completed a minimum of 10 years of service are eligible for a pension under the Unified Pension Scheme. However, the full benefits of the scheme, including the guaranteed pension, apply to those who have served for at least 25 years.

The scheme is optional for current employees enrolled in the National Pension System (NPS) and those opting for Voluntary Retirement under NPS. Future employees will also have the choice to join the Unified Pension Scheme (UPS). However, once an employee decides to switch to UPS, the decision is irreversible. All central government employees are eligible for the UPS, while the NPS is available to both government and private sector employees, except those in the armed forces.

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Unified Pension Scheme (UPS) Minimum Pension Amount:

Union Information and Broadcasting Minister Ashwini Vaishnaw announced that the Unified Pension Scheme gives a minimum monthly pension of ₹10,000 for employees who retire after serving a minimum of 10 years. (National Pension System: Housewives Can Earn Up To ₹45k A Month Post The Age Of 60)

In the unfortunate event of an employee's death, the family will be entitled to 60% of the pension amount that the employee was receiving at the time, ensuring continued financial support for the dependents.

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