Cabinet approves Unified Pension Scheme
Many important announcements were made in the Union Cabinet meeting on Saturday. The biggest decision among these was regarding the Unified Pension Scheme (UPS). There are many big announcements in this scheme brought for government employees. The biggest special thing about UPS is that like the Old Pension Scheme (OPS), government employees will get 50 percent of the average basic salary after retirement. However, many standards and rules have also been fixed for this.
Approval to the recommendation of Integrated Pension Scheme
Union Minister Ashwini Vaishnav informed about the cabinet decision. He said that ‘we have approved the Integrated Pension Scheme i.e. UPS. Government employees serve the common citizens across the country. Government employees across the country provide their services to the common citizens in services like railways, police, postal service, medical. This runs a system of society. Government employees have an important place in the society. Issues related to the social security of government employees have been raised from time to time and good decisions have also been taken on it.’
‘The pension received after retirement i.e. super annuation is an important part of social security. There was a demand from government employees across the country that the New Pension Scheme i.e. NPS should be improved. In April 2023, a committee was formed under the chairmanship of Dr. Somanathan and detailed consultations were held with more than a hundred employee organizations-unions. The Reserve Bank was talked to. The Finance Secretaries of the states, political leadership, employee unions gave their suggestions. After this, the committee recommended the Integrated Pension Scheme. The Cabinet has approved this scheme.’
Five pillars of UPS, the scheme will be implemented from April 1, 2025
1. Assured pension of 50 percent
Upon adopting UPS, assured pension will be available. Its amount will be 50 percent of the average basic salary of 12 months before retirement.
This amount will be available only on service up to 25 years. Pension will be given in proportion to that for less than 25 years and more than 10 years of service.
2. Family pension
Before the death of any employee, 60 percent of the total pension amount will be given to the family.
3. Minimum Pension
After at least 10 years of service, a minimum pension of Rs 10,000 per month will be assured. Including dearness allowances, this amount will be around Rs 15,000 as per today.
4. Indexation with inflation rate
In the cases of all the three types of pensions mentioned above, i.e. assured pension, family pension and minimum pension, inflation indexation will be given on the basis of dearness relief i.e. DR.
5. Lump sum payment in addition to gratuity on retirement
For six months of service, 10 percent of the amount (salary + DA) will be paid in lump sum. That is, if someone has 30 years of service, then he will get a lump sum payment (emolument) on the basis of six months of service.
23 lakh employees to benefit, option of NPS and UPS
23 lakh employees of the central government will get the benefit of this. If someone wants to stay in NPS, they can stay in it. If they wants to adopt UPS, they can choose its option. State governments can also choose this structure. If state government employees join it, then 90 lakh employees are expected to benefit from it.
Central contribution increased to 18.5 percent
This will not be a burden on the employees. Till 10 years ago, employees and the government used to contribute 10-10 percent. Our government had increased the contribution to 14 percent. Now the contribution of the central government will increase to 18.5 percent. This scheme will be implemented from April 1, 2025.
