Integrated Pension Scheme: The Central Government has announced the implementation of Integrated Pension Scheme (UPS) for government employees under the National Pension System (NPS). The scheme will be applicable from 1 April 2025. The objective of this scheme is to provide more secure pension services to the employees. According to the notification issued by the government, once the UPS option is selected, the employees will not be able to go back to the NPS. This scheme is not only for central government employees, but even if the state governments want, they can implement it for their employees.
Pension and benefits
Under the Unified Pension Scheme, before retirement, 50% of the last 12 months average basic salary will be available as pension, provided the employee has completed the minimum 25 years of service. If the employee has served between 10 and 25 years, then he will be given a minimum monthly pension of Rs 10,000. Employees taking voluntary retirement will start getting this pension from the same age at which they would take general retirement. If the pensioner dies, the family will get 60% of the pension.
Inflation relief
The government has clarified that pension, family pension and minimum pension will be linked to inflation relief. The advantage of this will be that pensioners will not affect inflation.
You will get money on retirement together
At the time of retirement, employees will get additional amount in addition to gratuity. This amount will be 1/10th of the original salary and dearness allowance for every six months of service. This lump sum amount will not have any effect on pension.
Pension fund and contribution
Two funds will be built under integrated pension scheme
Personal Fund: Employees and central government will contribute equally in this.
Pool Corpus: The government will make additional contribution in this. Employees will have to contribute 10% of their basic salary + dearness allowance (DA), which the government will deposit in equal proportion. Apart from this, the government will contribute 8.5% to the pool fund.
Investment option
Employees will have the freedom to choose investment options for their individual funds. If no employee chooses an option, the default investment scheme set by the Pension Fund Regulatory and Development Authority (PFRDA) will be applicable.
