The Central Government of India has introduced a Unified Pension scheme for Central Govt of India employees. The UPS Pension ensures a secure and stable financial future for its employees post-retirement.
Let’s explore more details about UPS Pension Scheme, outlining its key features, eligibility criteria, benefits, and how government employees can maximise their retirement benefits through this scheme.
Table of Contents
What is the new UPS Pension Scheme?
The New UPS Pension Scheme is a defined Benefit Pension Plan, where the pension amount is calculated based on the employee’s salary and length of service. This ensures that retirees receive a guaranteed pension throughout their retirement.
The salient features of the UPS are:
Assured pension
The employees who have served for 25 years or more will get 50% of the average basic pay drawn over the last 12 months just before superannuation.
Those who served a minimum of 10 years will get proportionate pension money.
Assured Family Pension
The family will get assured 60% pension amount of the employee. For this purpose, the last drawn pension ( just before the demise) of the employee will be considered.
Suppose Mr Bestii was getting a pension of Rs 1 lac at the time of his demise. His family will get Rs 60000 as a Family pension.
Assured Minimum Pension:
The employees who have served for at least 10 years of service, will get an Assured minimum pension of Rs.10,000 per month upon retirement.
Inflation indexation
With time the pension amount will increase as per inflation indexation. The Assured Pension, Assured Family pension and assured minimum pension will be increased based on inflation indexation.
Dearness Relief
Just like serving employees, retirees under the Unified Pension Scheme will receive Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).
Lumpsum Payment at Retirement
The Central Govt. of India employees will also get a lump sum payment and Gratuity at the time of Retirement. This lump sum payment will be 1/10th of the employee’s monthly emoluments (including pay and Dearness Allowance) as of the date of retirement, for every completed six months of service.
This lump sum payment will not reduce the quantum of the assured pension.
What Prime Minister Narendra Modi said
“We are proud of the hard work of all government employees who contribute significantly to national progress. The Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future,” Prime Minister Narendra Modi said in a post on X
Who will Contribute to the UPS Pension Scheme?
Both Employees and the Govt will contribute to the UPS Pension Scheme. The employee will contribute 10% of their salary with the government matching this contribution.
Conclusion
The UPS Pension Scheme is a cornerstone of the Central Government’s commitment to the welfare of its employees. With its unique features, UPS scheme provides a robust safety net for central government employees, ensuring they enjoy a secure and comfortable retirement.
For central government employees, understanding the UPS Pension Scheme is crucial to making informed decisions that maximize their post-retirement income and overall financial well-being.
