The central government has introduced the Unified Pension Scheme (UPS) to ensure financial security for central employees after retirement.
The scheme combines features from the Old Pension Scheme (OPS) and the National Pension System (NPS), offering employees guaranteed pensions for a stable and dignified retirement.
The UPS will be effective starting from April 1, 2025, as per a government notification issued on January 24, 2025.
Eligibility and Conditions for UPS
The UPS is available to central employees who are currently enrolled in the NPS.
However, to be eligible, employees must meet certain requirements, including a minimum of 10 years of service. Here are the key eligibility conditions:
Superannuation: Employees who retire after completing at least 10 years of service are entitled to an assured pension from the date of their retirement.
Retirement under FR 56(j): Employees retiring under government rules without penalty are also eligible for a pension starting from the retirement date.
Voluntary Retirement: Employees opting for voluntary retirement after 25 or more years of service will start receiving pension payments from the age of superannuation.
However, employees who are dismissed, removed, or voluntarily resign are not eligible for the UPS.
Payout Calculation and Family Benefits
The UPS provides various payout options based on the length of service:
Fully Assured Payout: Employees with over 25 years of service will receive 50% of their average basic pay over the last 12 months of service.
Pro-Rata Payout: Employees with fewer than 25 years of service will receive a payout proportional to their years of service.
Minimum Assured Payout: Employees with 10+ years of service are guaranteed a minimum payout of Rs 10,000 per month.
For employees who take voluntary retirement after 25 years of service, pension payments will begin once they reach the age of superannuation.
Family Payment in Case of Death
If a pensioner passes away after retirement, the legally married spouse will receive 60% of the last admissible payment as a family benefit, based on the date of retirement.
Additional Benefits: DR and Lump Sum Payments
Dearness Relief (DR): DR will be applicable to both the assured pension and family payments once they commence.
Lump Sum Payment: At the time of superannuation, employees will receive a lump sum payment equivalent to 10% of their monthly pay (basic pay + dearness allowance) for every six months of completed service. This payment will not impact the monthly pension.
Implementation of UPS
The UPS will be fully implemented on April 1, 2025. Employees will have the option to choose between the NPS and the new UPS.
For retired employees wishing to switch to UPS, a suitable top-up payment system will be introduced for a smooth transition.
The UPS brings together the benefits of both OPS and NPS, offering a more predictable and secure retirement plan for government employees.
