Unified Pension Scheme: There is a preparation to implement the Unified Pension Scheme (UPS) in the country from 1 April 2025. On August 24, 2024, the Union Cabinet approved the UPS and the Finance Ministry notified this scheme on January 25 this year.
There is a constant discussion about UPS that what is special in this new scheme. How much will the pension be? Who will get the benefit and how? If you also have such questions in your mind, then in this article we are telling you the answers to all these…
Who can take advantage
According to the gazette notification issued by the Finance Ministry, UPS will be applicable from April 1, 2025 for those central government employees who are covered under the National Pension System (NPS) and those who opt for it under NPS. 23 lakh government employees will get the option to choose between UPS and NPS. Existing central employees under NPS, as well as future employees of the central government on the date of implementation of UPS, can either opt for UPS under NPS, or go with NPS without UPS.
How much pension is promised
Under the Unified Pension Scheme, 50% of the average basic pay earned by the employee in the 12 months before his retirement is promised as a full assured pension after retirement. According to the notification, assured pension will not be available in case the employee is removed or dismissed from service or resigns. The rate of full assured payment will be 50% of the average basic pay of the 12 months just before retirement. But for this, the employee must have a minimum service of 25 years.
If the minimum service of the employee is less than 25 years, there will be pension under UPS but it will be less. If the service of the employee is 10 years or more, then a minimum pension of Rs 10,000 per month will be guaranteed.
How to get benefit
If any employee covered under NPS, who is in service on the date of implementation of UPS, and exercises the UPS option, the funds available in the Permanent Retirement Account Number of the employee will be transferred to the employee’s personal fund under UPS.
Government’s contribution in pension will increase
At present, the government’s contribution to the pension of a central government employee is 14%. UPS will increase this contribution of the government to 18.5%. At the same time, employees will have to deposit 10% of their basic salary and dearness allowance in UPS.
What will happen in case of voluntary retirement and death
If a government employee takes voluntary retirement after completing a minimum qualifying service period of 25 years, then the assured payout of pension under UPS will start from the date on which the employee retires. But this will happen only if the employee’s service has been continuous. If the beneficiary dies after retirement, then the legally married spouse of the employee will get family pension at the rate of 60% of the payout approved just before his death.
Dearness relief will be available on pension
Dearness Relief (DR) will be available on assured pension or family pension under UPS. Dearness Relief will be calculated in the same manner as the dearness allowance applicable to serving employees.
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