Union Cabinet approved the Unified Pension Scheme for government employees.
For a minimum qualifying service of 25 years, the scheme guarantees 50% of average basic pay drawn over the final twelve months prior to superannuation.
The scheme ensures that, in the case of the employee’s death, their family will get 60% of their pension.
After at least ten years of service, a basic pension of at least 10,000 rupees per month will be guaranteed upon superannuation.
Assured pensions, guaranteed family pensions, and guaranteed minimum pensions are all subject to inflation indexation.
As in case of serving personnel, there will be dearness relief based on the All India Consumer Price Index for Industrial Workers.
In addition to the gratuity, there will be a lump sum payment at superannuation.
The scheme will be effective from 1st April 2025. Additionally, the state governments will have the option to use the Unified Pension Scheme.
Employees of the central government would be able to select between UPS and the National Pension Scheme (NPS).
Current NPS subscribers of the central government will also have the choice to move to UPS.
Employees of the government hired on or after April 1, 2004, are covered by the NPS.
The NPS is based on a contribution model as opposed to the defined benefit plan that is accessible to workers hired prior to this date.
A committee was formed led by Cabinet Secretary TV Somanathan to address the issues around new pension scheme.
