Union Cabinet approved the Unified Pension Scheme (UPS)
The Union Cabinet, led by Prime Minister Narendra Modi, approved the Unified Pension Scheme (UPS), which guarantees a pension of 50% of the average basic pay from the last 12 months before retirement, provided the employee has served for at least 25 years. The scheme also offers a family pension at 60% of the employee’s pension and ensures a minimum pension of ₹10,000 per month after 10 years of service. Unified Pension Scheme provides benefit of both new pension scheme as well as old pension scheme,
key features of Unified Pension Scheme here under:
- Assured Pension: 50% of average basic pay over the last 12 months before retirement for at least 25 years of service, proportionate for shorter service periods.
- Family Pension: 60% of the employee’s pension before their demise.
- Minimum Pension: ₹10,000 per month after at least 10 years of service.
- Inflation Indexation: Adjustments based on the All India Consumer Price Index for Industrial Workers. Both the assured pension and family pension are adjusted for inflation based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).
- Gratuity: A lump sum based on one-tenth of monthly emoluments for every six months of service.
- Immediate Family Pension: 6% of the pension transferred to the family upon the employee’s demise.
- Dearness Relief: Provided similar to service employees.
- Lump Sum Payment: At superannuation, 1/10th of monthly emoluments (pay + DA) is paid for every six months of service, without reducing the assured pension.
- UPS combines features of both OPS and the National Pension System (NPS) while allowing employees to contribute more for higher pensions. The government has increased its contribution to 18.5% under UPS.
For more details, visit the official press release