August 24, 2024,New Delhi: In a significant move aimed at enhancing financial security for its employees, the central government has approved the Unified Pension Scheme (UPS) for its government employees. The decision, announced on Saturday, is expected to impact approximately 23 lakh employees.
The UPS introduces several key features designed to ensure comprehensive pension benefits for government workers:
1. Assured Pension: Employees with a minimum of 25 years of service will receive an assured pension amounting to 50% of their average basic pay over the last 12 months of service. For those serving fewer than 25 years, the pension will be proportionate to their service duration, with a minimum qualifying service period of 10 years.
2. Assured Family Pension:In the event of an employee's death, the spouse will be entitled to a family pension amounting to 60% of the pension the employee was receiving before their demise.
3. Assured Minimum Pension: Retirees with at least 10 years of service are guaranteed a minimum pension of ₹10,000 per month.
4. Inflation Indexation: Both assured pensions and family pensions will be adjusted for inflation, ensuring they keep pace with the cost of living.
5. Dearness Relief: Retirees will also benefit from Dearness Relief, based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to current employees.
6. Lump Sum Payment on Superannuation: In addition to gratuity, retirees will receive a lump sum payment equivalent to 1/10th of their monthly emoluments for every completed six months of service, not affecting their assured pension.
The implementation of UPS is expected to directly benefit 23 lakh central government employees, with the potential to extend to 90 lakh if state governments adopt the scheme. This comes in response to recent movements by some states to revert to the Old Pension Scheme (OPS) and demands from employee organizations for similar benefits.
The National Pension Scheme (NPS), which has been in place for central government employees since January 1, 2004, will continue to apply to new employees. The OPS, while offering 50% of the last drawn salary as pension, is considered unsustainable due to its non-contributory nature and the increasing fiscal burden on the government.
The new UPS represents a major step towards providing a more secure and stable retirement plan for government employees, aligning pension benefits with inflation and ensuring a consistent financial support system for retirees.