Modi Government Green-lights Unified Pension Scheme (UPS); Check Features and Benefits

The Union Cabinet, led by Prime Minister Narendra Modi, has approved the Unified Pension Scheme (UPS), a new initiative designed to ensure government employees receive a guaranteed pension, family pension, and a minimum assured pension.

In addition, the Cabinet sanctioned the continuation of three existing umbrella schemes, which have now been consolidated into a single central sector programme called ‘Vigyan Dhara,’ managed by the Department of Science and Technology (DST). The government has earmarked ₹10,579.84 crores for the implementation of ‘Vigyan Dhara’ during the 15th Finance Commission period, spanning from 2021-22 to 2025-26.

Under the UPS, central government employees will have the option to choose whether they want to remain in the National Pension Scheme (NPS) or switch to the Unified Pension Scheme. State governments can also decide to adopt this new UPS module.

The UPS will take effect from April 1, 2025, and will apply to all those who retired under the NPS from 2004 onwards.

Informing about the government's approval to the UPS, union minister Ashwini Vaishnaw said, "Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension...50% assured pension is the first pillar of the scheme...second pillar will be assured family pension...About 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS)...There will be an option for the employees to opt between NPS and UPS..."

#WATCH | Union Minister Ashwini Vaishnaw says, "Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension...50% assured pension is the first pillar of the scheme...second pillar will be assured family… pic.twitter.com/HmYKThrCZV

— ANI (@ANI) August 24, 2024

Key Features of UPS:

- Assured Pension: Employees will receive 50% of the average basic pay drawn during the last 12 months before retirement, provided they have a minimum qualifying service of 25 years. Those with shorter service periods, but at least 10 years, will receive proportionate benefits.
- Assured Family Pension: In the event of the employee's demise, the family will receive 60% of the employee's pension.
- Assured Minimum Pension: A guaranteed minimum pension of ₹10,000 per month will be provided upon retirement, given at least 10 years of service.
- Inflation Indexation: The assured pension, family pension, and minimum pension will be adjusted for inflation, with Dearness Relief linked to the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to that provided to serving employees.