Unified Pension Scheme, UPS : The Union Cabinet on Saturday approved the Unified Pension Scheme. There are 5 major benefits of this scheme. These include assured pension, assured family pension, assured minimum pension, indexation with inflation and additional payment other than gratuity.
Unified Pension Scheme : The Modi Cabinet has approved the Unified Pension Scheme. In this, government employees will get about 50 percent of their last salary as pension. This decision has been taken in the Union Cabinet meeting held on Saturday. Union Minister Ashwini Vaishnav has given this information. Vaishnav said, ‘Today the Union Cabinet approved the Integrated Pension Scheme for government employees.(UPS) is approved. A 50% assured pension is the first pillar of this scheme. The second pillar will be assured family pension. About 23 lakh central government employees will benefit from the Integrated Pension Scheme. Employees will have the option to choose between NPS and UPS.
There are 5 pillars of this scheme
Ashwini Vaishnav said that we looked at the pension schemes of the world and consulted experts. After that, keeping in view the economy of India, the suggestion of a unified pension scheme was made. Today the Union Cabinet chaired by PM Modi has approved this scheme. This scheme will be implemented in the coming time. He said that there are 5 pillars of this scheme. He said,The biggest point from the employees was that they want an assured pension. This was a reasonable demand. After doing complete research on this demand, we have brought a 50 percent assured pension in this scheme with a process.
How much pension will you get?
Vaishnav said, ‘This amount will be 50 percent of the average basic pay of the 12 months before retirement. The service qualification for this pension will be 25 years. That means, the employee who serves for 25 years will be able to get this assured pension. If the service is less than 25 years and more than 10 years, then he will get pension in proportion to the service.
Family pension on death of employee
If the employee dies, family pension helps the family a lot. Vaishnav said that the second pillar in this scheme is assured family pension. The wife/husband of the deceased employee will get 60 percent of the pension that was there before the death of any employee.
Provision of minimum pension
The third pillar of the scheme is assured minimum pension. Many times, the service of the employee is less and the amount of contribution made during the service does not provide a sufficient amount in pension. This was also a big issue among the central government employees. Therefore, a provision of assured minimum pension of Rs 10,000 per month has been made in this scheme. As of today, the dearness relief available is Rs 15,000 per month.
Indexation with inflation
The fourth pillar of this scheme is indexation with inflation. Just as there is dearness allowance in the salary of a Central Government employee, using the same index, inflation indexation will be done on all three – Assured Pension, Assured Family Pension and Assured Minimum Pension – on the same pattern. That means inflation will be taken into account in the pension.
Additional payment other than gratuity
The fifth pillar of this scheme is a lump sum payment in addition to gratuity on retirement. For every 6 months of service, 1/10th of the monthly salary (pay + DA) will be given on the date of retirement. This payment will not reduce the assured pension amount.
The burden of the scheme will not fall on the employees
The burden of the scheme will not fall on the employees
Vaishnav said that this scheme will benefit 23 lakh central government employees. Employees will have the option to stay in NPS if they want to. If state governments want to use this framework, they can do so. If state government employees also join this, then about 90 lakh employees will get the benefit of this scheme. The most important thing is that this scheme will not burden the employees.
Unified Pension Scheme (UPS) FAQ
1. What is the Unified Pension Scheme (UPS)?
The Unified Pension Scheme (UPS) is a new pension scheme approved by the Union Cabinet under the Modi government. It aims to provide assured pension benefits to central government employees, offering approximately 50% of their last drawn salary as a pension.
2. What are the key benefits of the Unified Pension Scheme?
The UPS offers five major benefits:
- Assured Pension: 50% of the last salary as a pension.
- Assured Family Pension: 60% of the employee’s pension will be provided to the family in case of the employee’s death.
- Assured Minimum Pension: A minimum pension of ₹10,000 per month.
- Indexation with Inflation: Pension amounts will be adjusted based on inflation, similar to the dearness allowance for active employees.
- Additional Payment Other Than Gratuity: A lump sum payment in addition to gratuity will be given on retirement.
3. Who is eligible for the Unified Pension Scheme?
Central government employees who have completed at least 25 years of service are eligible for the full benefits of the UPS. Employees with service between 10 to 25 years will receive a proportional pension based on their years of service.
4. How is the pension amount calculated under UPS?
The pension amount under UPS will be 50% of the average basic pay of the last 12 months before retirement. This ensures that the pension is aligned with the employee’s recent earnings.
5. What happens to the pension benefits if an employee dies?
In the event of an employee’s death, the UPS ensures that 60% of the pension the employee was entitled to will be provided to the spouse or family as a family pension.
6. Is there a minimum pension guaranteed under UPS?
Yes, the UPS guarantees a minimum pension of ₹10,000 per month. This ensures that even employees with shorter service durations receive adequate support during retirement.
7. How does the scheme adjust for inflation?
The UPS includes a provision for inflation indexation, meaning that pensions, including the assured pension, assured family pension, and assured minimum pension, will be adjusted based on the inflation rate. This is similar to how the dearness allowance is adjusted for active employees.
8. Is there any additional benefit apart from the pension and gratuity?
Yes, under UPS, employees will receive a lump sum payment in addition to their gratuity. This payment will be calculated as 1/10th of the monthly salary (pay + DA) for every 6 months of service, provided at the time of retirement.
9. Will the Unified Pension Scheme replace the National Pension System (NPS)?
No, the UPS will not replace NPS. Government employees will have the option to choose between the National Pension System (NPS) and the Unified Pension Scheme (UPS) based on their preference.
10. How many employees are expected to benefit from the UPS?
Approximately 23 lakh central government employees will benefit from the Unified Pension Scheme. If state governments choose to adopt this framework, around 90 lakh employees could benefit in total.
11. Will the UPS scheme impose any financial burden on the employees?
No, the implementation of the UPS will not impose any additional financial burden on the employees. The scheme is designed to provide benefits without requiring extra contributions from employees.
12. Can state government employees opt into the Unified Pension Scheme?
Yes, state governments have the option to adopt the Unified Pension Scheme for their employees. If they do so, state government employees can also benefit from the scheme’s provisions.
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