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Unified Pension Scheme: From Inflation Protection To Family Pension Benefit– Know Key Features
Prime Minister Narendra Modi's Cabinet introduced the Unified Pension Scheme (UPS), starting April 1, 2025. Combining the best features of the Old Pension Scheme (OPS) and the National Pension Scheme (NPS), it will provide guaranteed pensions, family pensions, and minimum pensions to 23 lakh government employees. Here are the key benefits of the new scheme.
Guaranteed Pension Amount
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Subscribers to the UPS are assured a pension equivalent to 50 per cent of their average basic pay over the last 12 months before retirement. This benefit is available for employees with at least 25 years of service, with scaled amounts for shorter service periods down to a minimum of 10 years.
Family Pension Benefit
If a subscriber passes away, their family will receive 60 per cent of the pension amount. This ensures ongoing financial support for the subscriber's loved ones.
Minimum Pension for Shorter Service
Employees retiring with less than 25 years of service are still covered by the UPS. The scheme guarantees a minimum pension of Rs 10,000 per month, provided they have at least 10 years of service.
Inflation Protection
The UPS includes inflation protection, adjusting the assured pension, family pension, and minimum pension to keep pace with rising living costs. These adjustments are based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to the Dearness Relief for current employees.
Lump Sum Payment at Retirement
In addition to gratuity, UPS subscribers will receive a lump sum payment at retirement. This will be 1/10th of their monthly emoluments (pay + DA) for every six months of service, and it will not impact the guaranteed pension amount.
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