A big update has come for central employees regarding the new pension scheme (UPS). Pension Fund Regulatory and Development Authority (PFRDA) has issued a notification to implement the Integrated Pension Scheme (UPS). The scheme will be applicable to central government employees under the National Pension System (NPS).
Major provisions of UPS scheme
- Retirement will provide 50% of the average basic salary of the last 12 months in the form of sure pension.
- This benefit will be available only to those employees who have completed the minimum 25 years of service.
- If an employee is dismissed, removed from service, or resigns, he will not get the benefit of this scheme.
It will be applicable from April 1, 2025
- UPS rules will come into force from 1 April 2025.
- These rules will be effective on all central government employees under the current NPS and employees recruited after 1 April 2025.
- Enrollment and claim form will be available online for employees, which can also be submitted physically.
- With this scheme, about 23 lakh government employees will get the option to select between UPS and NPS.
OPS vs UPS: Main Difference
| Pension scheme | Pension basis | Employee contribution | Employer contribution |
|---|---|---|---|
| OPS (Old Pension Scheme) | 50% of the final basic salary | No contribution | No contribution |
| UPS (new integrated pension scheme) | 50% of the average basic salary of 12 months before retirement | 10% (Basic + DA) | 18.5% |
Mixed reactions are being seen among government employees regarding the new pension scheme. However, its main objective is to make the government pension system more structured and permanent.
