Starting April 1, 2025, government employees will have the option to secure their post-retirement financial future through the newly introduced Unified Pension Scheme (UPS) or continue with the National Pension Scheme (NPS).
In a landmark decision aimed at enhancing the financial stability of government employees after their retirement, the central government has sanctioned a scheme that ensures 50% of an employee’s last drawn salary as a guaranteed pension.
The Unified Pension Scheme, commencing on April 1, 2025, offers government employees a choice between the established National Pension Scheme (NPS) and this new scheme, tailored to provide greater security.
Key Highlights of the Unified Pension Scheme:
- The UPS guarantees a pension amounting to 50% of the average basic pay from the last 12 months prior to retirement, applicable to employees with a minimum of 25 years of service. For those with less than 25 years, the pension will be proportionally adjusted, provided they have completed at least 10 years of service.
- In the event of an employee’s demise, the scheme offers a family pension amounting to 60% of the employee’s pension at the time of death.
- The UPS ensures a minimum pension of Rs 10,000 per month after a decade of service.
- The scheme includes dearness relief, aligned with the All India Consumer Price Index (AICPI-IW), applicable to the assured pension, family pension, and minimum pension amounts.
- Upon retirement, employees will receive a lump-sum gratuity payment in addition to their pension. This gratuity is calculated as one-tenth of the monthly salary plus dearness allowance for every six months of service, without affecting the assured pension.
