Unified Pension Scheme: Eligibility, Minimum Amount, Key Benefits

The government has launched the Unified Pension Scheme (UPS), aimed at benefiting 23 lakh central government employees. Union Information and Broadcasting Minister Ashwini Vaishnaw announced the launch, stating that the new scheme will be implemented from April 1, 2025. “Some central employees met with the Prime Minister today. They were with the UPS in the meeting,” he added.

Unified Pension Scheme: Eligibility

According to Ashwini Vaishnaw, employees who have completed a minimum of 10 years of service are eligible to receive a pension under the UPS. However, the full benefits of the scheme, including the assured pension, apply to those with at least 25 years of service.The scheme is optional for existing employees under the National Pension System (NPS) and those opting for Voluntary Retirement Scheme (VRS) under NPS. Future employees will also have the option to join the UPS. However, once an employee opts into the UPS, the decision is final and cannot be reversed.

UPS: Minimum Pension Amount

Mr Vaishnaw revealed that the UPS guarantees a minimum pension of Rs 10,000 per month for employees who retire after completing at least 10 years of service.

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Key Benefits of the Unified Pension Scheme

Retirees will receive 50% of their average basic pay over the last 12 months before retirement as a pension. This benefit is available to employees with at least 25 years of service, with proportionate benefits for those with shorter service periods (down to a minimum of 10 years), revealed the Information and Broadcasting Minister.The government will increase its contribution to the pension fund from 14% to 18.5%. This increase does not affect the employee’s contribution, which remains unchanged.Mr Vaishanw stated that in case of a pensioner’s death, their family will receive 60% of the pension the retiree was receiving.Pensions under the UPS will be indexed to inflation. The Dearness Relief (DR) will be based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), providing protection against rising living costs.At the time of superannuation, retirees will receive a lump-sum payment in addition to their gratuity, revealed Ashwini Vaishnaw. This payment will be equivalent to one-tenth of the monthly emoluments (pay + DA) as of the date of superannuation for every six months of completed service. Importantly, this payment will not reduce the amount of assured pension.The scheme will also apply to past retirees under the NPS who have already superannuated. These retirees will receive arrears for the past period, with interest calculated at Public Provident Fund (PPF) rates.

Other Details

The UPS will be implemented by the Central Government, directly benefiting approximately 23 lakh Central Government employees.It will be implemented from April 1, 2025.The scheme’s architecture is designed for adoption by State Governments as well. If fully adopted, the UPS could benefit over 90 lakh government employees currently under the NPS across India.

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