The Cabinet has approved the Unified Pension Scheme, marking a significant step towards streamlining pension benefits for government employees.
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the Unified Pension Scheme (UPS).
The salient features of the UPS are:
- Assured pension: 50% of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service period upto a minimum of 10 years of service.
- Assured family pension: @60% of pension of the employee immediately before her/his demise.
- Assured minimum pension: @10,000 per month on superannuation after minimum 10 years of service.
- Inflation indexation: on assured pension, on assured family pension and assured minimum pension
Dearness Relief based on All India Consumer Price Index for Industrial Workers (AICPI-IW) as in case of service employees - lump sum payment at superannuation in addition to gratuity 1/10th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service
This payment will not reduce the quantum of assured pension.
| Feature | Old Pension Scheme (OPS) | New Pension Scheme (NPS) | Unified Pension Scheme (UPS) |
| Nature | Non contributory | Contributory | Contributory |
| Employee Contribution | None | 10% of basic salary | 10% of basic salary |
| Government Contribution | None | 14% of basic salary | 18.5% of basic salary |
| Quantum of Pension | 50% of the last drawn salary | Based on accumulated corpus and market returns | 50% of the average basic pay from the last 12 months before retirement (with at least 25 years of service) |
| Family Pension | 30% of the last drawn basic pay (normal) or 50% for 10 years (enhanced) | Depends on the accumulated corpus and annuity plan | 60% of the pension last drawn |
| Inflation Adjustment | Adjusted for inflation through dearness relief | No guaranteed adjustment; depends on market performance | Adjusted for inflation based on the All India Consumer Price Index |
| Assured Minimum Pension | Not applicable | Not applicable | Rs.10,000 per month (with at least 10 years of service) |
| Lump Sum | Not | Partial | Lump sum |
The Cabinet approved the Unified Pension Scheme, a significant step towards streamlining pension benefits for government employees. This scheme aims to simplify the pension process and ensure uniformity across various government sectors. With the implementation of this scheme, pensioners can expect a more efficient and standardized system for receiving their pension benefits.
One of the key features of the Unified Pension Scheme is its focus on centralizing pension administration. By consolidating pension processes under one scheme, the government aims to reduce bureaucratic hurdles and improve the overall pension disbursement system. This move is expected to benefit a large number of retired government employees by providing them with a more organized and accessible pension framework.
The approval of the Unified Pension Scheme by the Cabinet underscores the government’s commitment to modernize and improve the pension system for its employees. This initiative not only simplifies pension procedures but also enhances transparency and accountability in the management of pension funds. Overall, the implementation of this scheme is a positive development that will positively impact the lives of pensioners across various government departments.
The Unified Pension Scheme (UPS) is set to be implemented starting from April 1st, 2025. This scheme aims to streamline pension benefits for all citizens under one unified system. It is designed to provide a more efficient and transparent process for pension disbursement, ensuring that retirees receive their benefits in a timely manner without any discrepancies.