Centre Approves Unified Pension Scheme, Ensuring 50% of Salary as Pension for Government Employees
Centre Approves Unified Pension Scheme, Ensuring 50% of Salary as Pension for Government Employees
The Union Cabinet has approved a Unified Pension Scheme (UPS) that guarantees 50% of the average basic salary as a pension for 23 lakh government employees who joined under the National Pension System (NPS). This decision comes after the finance ministry formed a committee led by Finance Secretary TV Somanathan last year to review the pension framework and suggest any necessary changes.
The NPS, implemented for government employees who joined after April 1, 2004, was based on contributions rather than the defined benefits system that applied to employees before this date. Under the new UPS, government employees will be eligible to receive 50% of their average basic pay drawn over the last 12 months before retirement as a pension. To qualify for the full pension, an employee must have a service length of 25 years. For those with less than 25 years of service, the pension will be proportionate, with a minimum eligibility of 10 years.
NPS subscribers can choose to switch to the UPS, which offers a guaranteed pension starting from the next financial year. This new scheme will be effective from April 1, 2025, and the benefits, including arrears, will apply to those who retire until March 31, 2025.
The decision to approve the UPS comes amid discussions in several non-BJP-ruled states to revert to the DA-linked Old Pension Scheme (OPS), with some employee organizations also demanding the same.
