Unified Pension Scheme Explained: From assured pension to inflation indexation - 5 salient features

The new Unified Pension Scheme (UPS) for central government employees combines benefits of the Old Pension Scheme and National Pension Scheme, providing assured pensions indexed to inflation, family pensions, and minimum pensions

Livemint
Published25 Aug 2024, 08:01 AM IST
The Unified Pension Scheme has been launched by the union government for employees.
The Unified Pension Scheme has been launched by the union government for employees.

In a major move to amplify retirement benefits for employees, the Cabinet led by Prime Minister Narendra Modi, announced the Unified Pension Scheme (UPS) for central government employees on Saturday. With the UPS, the government has attempted to combine the benefits of the Old Pension Scheme (OPS) with the existing National Pension Scheme (NPS).

The UPS, effective April 1, 2025, will provide assured pensions, family pensions, and minimum pensions to 23 lakh government employees. Here are the key benefits of the Unified Pension Scheme approved by the Union Cabinet last night.

Also Read | ’UPS reflects govt’s commitment to employees welfare and secure future,’ says PM

Unified Pension Scheme: Key features

The UPS can be seen as an upgrade of the existing NPS for government employees, who will continue contributing 10% of their income to the scheme. However, the government's contribution has increased to 18.5%, against 14% currently. UPS provides its subscribers with an assured pension, inflation indexation, and family pension. Here are the salient features of the scheme.

Also Read | Budget 2024: How budget ’may help save ₹35,000’ for Indian family pensioners

Assured pension

UPS subscribers will get an assured pension under the scheme. They would be entitled to 50% of the average basic pay drawn over the last 12 months before superannuation. The feature is available for employees with at least 25 years of service. This pay is to be proportionate for lesser service periods up to a minimum of 10 years of service.

Also Read | How the national pension scheme can be utilized for early retirement

Assured family pension

The scheme also provides the benefit of assured family pension. Under this feature of the UPS, subscribers' family members will get 60% of the pension immediately after their demise.

Assured minimum pension for employees less than 25 yrs service

Employees retiring without completing twenty-five years of their service can also get pensions under the UPS. The scheme provides the assured minimum pension benefit of 10,000 per month on superannuation after a minimum of ten years of service.

Also Read | How to choose allocation towards schemes E/G/C in NPS?

Inflation indexation

The assured pension, family pension, and assured minimum pension provided to the UPS subscribers will be indexed to inflation. There will be Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) as in the case of serving employees, Information and Broadcasting Minister Ashwini Vaishnaw said on Saturday, August 25.

Lumpsum payment at superannuation

Under the UPS scheme, subscribers will also get the lump sum payment at superannuation in addition to gratuity 1/10th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service. Notably, the payment will not affect the assured pension amount.

Catch all the Business News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:25 Aug 2024, 08:01 AM IST
Business NewsNewsIndiaUnified Pension Scheme Explained: From assured pension to inflation indexation - 5 salient features

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Bharat Electronics share price

    283.95
    03:58 PM | 1 OCT 2024
    -1.1 (-0.39%)

    Tata Steel share price

    167.00
    03:56 PM | 1 OCT 2024
    -1.45 (-0.86%)

    Tata Power share price

    481.00
    03:58 PM | 1 OCT 2024
    -1.7 (-0.35%)

    Zee Entertainment Enterprises share price

    140.05
    03:55 PM | 1 OCT 2024
    2.4 (1.74%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Caplin Point Laboratories share price

    2,080.30
    03:52 PM | 1 OCT 2024
    182.75 (9.63%)

    PB Fintech share price

    1,729.65
    03:57 PM | 1 OCT 2024
    113.65 (7.03%)

    Welspun Living share price

    175.00
    03:50 PM | 1 OCT 2024
    11.25 (6.87%)

    National Aluminium Company share price

    224.15
    03:56 PM | 1 OCT 2024
    13.75 (6.54%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      76,915.00-330.00
      Chennai
      76,921.00-330.00
      Delhi
      77,073.00-330.00
      Kolkata
      76,925.00-330.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.86/L0.00
      Chennai
      100.75/L-0.10
      Kolkata
      104.95/L0.00
      New Delhi
      94.72/L0.00

      Popular in News

        HomeMarketsPremiumInstant LoanMint Shorts