PM Modi launches Unified Pension Scheme for Govt Employees, Know about this scheme

The BJP-led central government has introduced a new pension plan called the Unified Pension Scheme (UPS). This scheme, launched on Saturday, provides more flexibility and choice for government employees regarding their retirement plans.

What is the Unified Pension Scheme (UPS)?

The UPS allows central government employees to choose between staying with the existing National Pension Scheme (NPS) or switching to the new Unified Pension Scheme. This choice is significant because it gives employees more control over their retirement planning. Similarly, state governments have the option to adopt this new UPS module for their employees.

When Will the UPS Come into Effect?

The Unified Pension Scheme is set to be implemented from April 1, 2025. It will apply to all individuals who have retired under the NPS since 2004, ensuring that a wide range of government employees can benefit from this new initiative.

Key Features of the Unified Pension Scheme

1. Assured Pension: One of the main benefits of the UPS is the assured pension. Under this scheme, retirees will receive 50% of their average basic pay drawn over the last 12 months before retirement. This benefit requires a minimum of 25 years of service, although it is proportionally adjusted for those who have served less than 25 years but more than 10 years.
2. Assured Family Pension: In case of an employee’s demise, their family will be entitled to an assured family pension, which is set at 60% of the pension amount the employee was receiving before their passing. This feature provides financial security to the families of government employees.
3. Assured Minimum Pension: The UPS guarantees a minimum pension amount of ₹10,000 per month for those retiring after at least 10 years of service. This minimum pension ensures that retirees have a basic level of financial support regardless of their service duration.
4. Inflation Indexation: To protect against inflation, the scheme includes Dearness Relief, which adjusts the pension, family pension, and minimum pension based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). This adjustment will help maintain the purchasing power of the pension over time, similar to the adjustments made for currently serving employees.

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Conclusion

The Unified Pension Scheme marks a significant shift in how government employees can plan for their retirement. By offering assured pensions, support for families, and protection against inflation, the UPS aims to provide greater financial stability and peace of mind for government employees and their families. With its implementation just around the corner, it’s essential for government employees to understand their options and make informed decisions about their retirement plans.