With the aim of benefitting 23 lakhs central government, the government has launched the Unified Pension Scheme. Launced by Ashwini Vaishnav, stating that the scheme will be employed form April1, 2025.
Employees with at least 10 years of service are allowed to get pension under UPS. Moreover, However, the full benefits of the scheme, along with assured pension, accrue only to a person with at least 25 years of service.
| Feature | Description |
| Pension Amount | 50% of the average basic salary earned over the past 12 months prior to retirement. Proportional for service ranging from 10-25 years. |
| Family Pension | 60% of the employee’s pension in case of death. |
| Employee Contribution | 10% of gross basic salary. |
| Government Contribution | 18.5% of basic salary |
Eligibility
As stated earlier, employees completed a minimum service of 10 years are eligible for the Unified Pension Scheme. Central government employees who serve a minimum of 25 years will receive a guaranteed pension amounting to 50% of their average basic pay over the last 12 months before retirement.
For those less than 25 years, there is a proportionate pension to that taken in service, with the minimum qualifying service fixed at 10 years.
If for some reason the employee dies then their spouse will get a family pension, at a rate of 60% pension of the employee. The new pension scheme offers current employees under NPS a voluntary option. Employees who want to retire early under NPS can choose whether to join the new scheme.
Also, in the future, employees will have an option to join this new scheme. Moreover, once you opt for this new scheme, you cannot revert back to the old one.
Benefits of the Unified Pension Scheme
The UPS assures a guaranteed pension of 50% of the average of the basic pay drawn during the last 12 months preceding retirement for an assured minimum qualifying service of at least 25 years. The new pension scheme also provides the facility of guaranteed family pension at the rate of 60% of the pension of the employee in case the latter dies.
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Upon retirement after attaining a minimum of 10 years of service, the Assured Benefit in the form of a monthly minimum pension shall be Rs. 10,000. Moreover, some other benefits include:
Growth of investment: Your contribution will be invested in a number of financial instruments and thus returns may be more compared to the old pension system.
Flexibility and Portability: One may transfer pension account to another job, sector, or geographical location, without losing the entitlements.
Government support: The government helps to make the pension benefits better.
Fiscal sustainability: The government is careful about using money cautiously and must be able to make the pension scheme sustainable in the long term.
Conclusion
Hence, the UPS offers provides a comprehensive retirement plan that allows combining the security of a guaranteed pension with the potential for growth through investment.
Government support and fiscal sustainability guarantee that the Scheme will provide long-term financial security for employees. You can get more updates for government schemes on The Entertain Adda.