Union Cabinet approves assured 50 per cent of salary as pension for govt employees under Unified Pension Scheme. the new Unified Pension Scheme will benefit benefit 23 lakh central government employees.
The Narendra Modi government on Saturday approved assured 50 per cent of salary as pension for government employees under Unified Pension Scheme.
Unified Pension Scheme:
The NDA government on Saturday (August 24, 2024) reversed a 21-year-old reform of India’s civil services pension system boldly brought in by the Atal Behari Vajpayee government, unveiling what it called a new ‘Unified Pension Scheme’ (UPS) that is virtually akin to the Old Pension Scheme, and assures government employees 50% of their last drawn pay as a lifelong monthly benefit.
Union minister Ashwini Vaishnaw said,“Government employees have demanded some changes in the New Pension Schemes. For this, PM Modi constituted a committee under the chairmanship of Cabinet Secretary TV Somanathan. This committee held more than 100 meetings with different organisations and nearly all the states.”
The UPS, approved by the Union Cabinet on Saturday (August 24, 2024), also assures officials a periodic dearness relief hike in line with inflation trends, a family pension equivalent to 60% of a government worker’s pension in the case of their demise, and a lumpsum superannuation payout in addition to gratuity benefits at the time of retirement. Besides, a minimum pension of ₹10,000 a month has been promised for those who complete at least 10 years of central government service.
Announcing the decisions taken by the Cabinet, Information and Broadcasting Minister Ashwini Vaishnaw said there would be five pillars to the UPS. The first pillar deals with an assured amount to employees after having worked upon the demand in a methodical way and applying actuarial science making projections based on those models.
An assured pension of 50 per cent will be given which would be linked to the average basic pay given in the last 12 months of service before superannuation of the employee. “The qualifying service would be 25 years of service. If it’s less than 25 years but more than 10 years of service, then it would be provided on a pro-rata basis,” Vaishnaw said.Pillar two under the UPS deals with assured family pension in case of death of an employee. If some employee dies, then 60 per cent of the pension given just before his or her death would be provided to the deceased employee’s family after his or her death, the minister said.
The NDA government on Saturday (August 24, 2024) reversed a 21-year-old reform of India’s civil services pension system boldly brought in by the Atal Behari Vajpayee government, unveiling what it called a new ‘Unified Pension Scheme’ (UPS) that is virtually akin to the Old Pension Scheme, and assures government employees 50% of their last drawn pay as a lifelong monthly benefit.
The UPS, approved by the Union Cabinet on Saturday (August 24, 2024), also assures officials a periodic dearness relief hike in line with inflation trends, a family pension equivalent to 60% of a government worker’s pension in the case of their demise, and a lumpsum superannuation payout in addition to gratuity benefits at the time of retirement. Besides, a minimum pension of ₹10,000 a month has been promised for those who complete at least 10 years of central government service.
The Cabinet decision was informed by recommendations of a committee under former Finance Secretary and Cabinet Secretary-designate T.V. Somanathan, set up in March 2023 to review the National Pension System (NPS) [originally known as the New Pension Scheme] for government employees in a way that balances “their aspirations with fiscal prudence”.
Key features and benefits
The Union Cabinet has approved a major reform in the pension system by introducing the Unified Pension Scheme (UPS). The introduction of the Unified Pension Scheme comes in response to widespread demands from government employees for changes in the New Pension Scheme (NPS). The NPS, which was implemented in the early 2000s, was criticised for not providing a guaranteed pension amount, leaving many employees uncertain about their financial security after retirement.
The Central Secretariat Service Forum was pleased that the Government has realised “a genuine need to ponder over NPS” and said the UPS is better with an assured pension. However, the forum resolved to continue asking for its “one and only demand”, the OPS, indicating they were not in favour of salary deductions in the UPS.
Shiv Gopal Mishra, secretary of the Joint Consultative Mechanism (JCM) between the central government and its employees, told The Hindu that they welcomed the UPS, adding that the Prime Minister had assured better coordination with employees in their hour-long meeting in the evening.
What is UPS scheme and benefits?
Unified Pension Scheme: All you need to know about key features & benefits Of UPS. Assured Pension: Under this scheme, retirees will receive a pension amounting to 50 percent of the average basic pay drawn over the last 12 months prior to retirement, for a minimum qualifying service of 25 years.3
Who will get UPS pension?
Who can avail the UPS? The UPS will come into effect from April 1, 2025 but will be applicable to all those who have retired under the NPS from 2004 onwards, Somanathan said. “In their case (NPS retirees), they will get arrears adjusted with whatever they have already drawn under the NPS,” he said.
What are unified pension scheme details?
The scheme guarantees a pension equal to 50% of the average basic pay from the last 12 months before retirement, for employees with at least 25 years of service. For those with less than 25 years, the pension will be adjusted proportionally, with a minimum of 10 years of service required.
What is UPS for government employees?
Announcing Cabinet decisions, Union Information and Broadcasting Minister Ashwini Vaishnaw said that under the Unified Pension Scheme (UPS), government employees will now be eligible to get 50 per cent of the average basic pay drawn over the last 12 months before the superannuation as pension
What is the difference between OPS and UPS?
OPS was unfunded non-contributory scheme, while UPS is a funded contributory scheme. The only difference in the changes made today is we are giving an assurance and not leave things to vagaries of market forces.
