Switching to UPS is considered final and binding once it is decided. UPS can be governed through regulations issued by the Pension Fund Regulatory and Development Authority (PFRDA). April 1, 2025, is the date on which the Integrated Pension Scheme will come into effect. Employees eligible under UPS are guaranteed a pension that is equal to 50% of their average basic pay for the 12 months preceding retirement. Pension will be proportionate for service periods ranging from 10 to 25 years. Employees will be eligible for a fully assured pension after completing at least 25 years of qualifying service. On the death of an employee, his family will be guaranteed a pension equal to 60% of the employee’s pre-death pension. Employees who have worked for at least ten years will be guaranteed a minimum pension of Rs 10,000 per month on retirement. For retirees, this guarantees a safety net.
Dr. Satyawan Saurabh
Recently, the Union Cabinet, chaired by the Prime Minister, has approved the Unified Pension Scheme (UPS) to replace the National Pension System (NPS). This is based on the suggestions of the. The recommendations will be effective from April 1, 2025. According to the UPS proposal, the benefits of the Old Pension Scheme (OPS) and the New Pension Scheme (NPS) will be combined together. The goal of this visionary approach to retirement planning in India is a secure and long-term pension system for all eligible employees. It seeks to preserve the freedom and choice of government employees as well as provide them with long-term financial security. Central government employees who opt for this option and are covered under the National Pension System (NPS) are covered under UPS. Current and future central government employees who are covered under NPS have the option to remain with the current NPS scheme or switch to UPS.
Switching to UPS is considered final and binding once it is decided. UPS can be governed through regulations issued by the Pension Fund Regulatory and Development Authority (PFRDA). April 1, 2025, is the date on which the Integrated Pension Scheme will come into effect. Employees eligible under UPS are guaranteed a pension that is equal to 50% of their average basic pay for the 12 months preceding retirement. Pension will be proportionate for service periods ranging from 10 to 25 years. Employees will be eligible for a fully assured pension after completing at least 25 years of qualifying service. On the death of an employee, his family will be guaranteed a pension equal to 60% of the employee’s pre-death pension. Employees who have worked for at least ten years will be guaranteed a minimum pension of Rs 10,000 per month on retirement. For retirees, this guarantees a safety net.
Central government employees who have worked for at least 25 years are guaranteed a pension. This is determined by taking half of their average base salary for the 12 months before retirement. UPS offers an assured minimum pension, an assured family pension, and an assured pension indexed to inflation. As well as dearness relief, which is based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) and is equal to that for support workers. One-tenth of the monthly salary and dearness allowance is added to the gratuity for every full six-month service period. Ten percent of their salary will still be contributed by employees who choose UPS. The government will contribute 18.5 percent instead of the current 14 percent. This guarantees that no additional financial pressure will be put on workers. When employees reach retirement, UPS provides guaranteed payouts.
In the 12 months before retirement, the UPS will pay a central government employee 50% of their average basic pay as long as they have completed 25 years of service. Workers who have worked for more than ten years but less than twenty-five years will be eligible for a proportionate pension. After ten years or more of qualifying service, employees are assured a minimum payment of Rs 10,000 every month. This payment will begin on the day they would have reached the retirement age if they had continued to work for those who voluntarily retire after 25 years of service. A legally married spouse will receive a family payment of 60% of the pay admissible to the holder in the event of the payment holder’s death after retirement. The guaranteed payment and the family payment will also be eligible for dearness relief, which will be determined in the same way.
For serving employees, dearness relief will be calculated in the same way as dearness allowance. UPS or guaranteed payout will not be available in case an employee resigns or is removed from service. Unlike the previous pension scheme, UPS is a contributory scheme, which means employees will have to contribute 10% of their basic pay and dearness allowance, while the central government, which is the employer, will contribute 18%. The corpus, which is primarily invested in government debt, will ultimately determine the payout based on market returns. UPS and National Pension Scheme (NPS) are the two options available to central government employees. Unlike UPS, NPS is market-linked. There are similarities between UPS and the Old Pension Scheme (OPS) in terms of the benefits offered. However, the way it is funded is very different.
UPS receives all its funding from the budget each year, unlike OPS, which was a pay-as-you-go program. Employees can build a retirement fund through NPS, a defined contribution scheme first introduced in 2004. For those looking for a more guaranteed pension, UPS offers an option.
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– Dr. Satyawan Saurabh,
Poet, freelance journalist and columnist, radio and TV panelist,
333, Fairy Garden, Kaushalya Bhawan, Barwa (Siwani) Bhiwani,
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