Big news for pensioners. The Finance Ministry dropped a notification on January 24 about the details of the Unified Pension Scheme (UPS), which is set to roll out in the country starting April 1, 2025. This scheme will be an option for employees under the National Pension System (NPS).
Since the announcement, central government employees have been trying to wrap their heads around some of the scheme’s provisions. They’re particularly looking for more information on when the guaranteed pension under UPS will kick in and the minimum years of service required for voluntary retirement. Employees are hoping that the Pension Fund Regulatory and Development Authority (PFRDA) will provide clearer guidelines before UPS launches in the next financial year.
Push for OPS to Return
Employee organization leaders are still not thrilled with the government’s decision. They’re not satisfied with just having the choice between NPS and UPS and are sticking to their demand for the reinstatement of the Old Pension Scheme (OPS).
They argue that instead of creating a divide between NPS and UPS, the government should focus on restoring OPS benefits.
What’s the UPS Notification About?
Employees are finding the UPS notification pretty tough to digest. They say it’s quite complicated for the average worker to understand.
How Much Pension Will Central Government Employees Receive?
If an employee’s average basic salary for the last 12 months before retirement is Rs 50,000 and they’ve worked for 25 years, contributing 10 percent each month, their monthly pension would be Rs 25,000 plus dearness relief (DR). For those who have worked for 15 years, the pension would be Rs 15,000 plus DR, calculated at a rate of 30 percent. The minimum pension for employees with 10 years of service will be Rs 10,000 plus DR under the UPS scheme.