There is big news about the new pension scheme for central employees. In fact, the Pension Fund Regulatory and Development Authority (PFRDA) has issued a notification to implement the Integrated Pension Scheme (UPS). This notification is for the central government employees under the National Pension System (NPS).
What is the plan?
Under this scheme, there is a provision to provide 50 percent of the average basic salary earned in 12 months before retirement as guaranteed pension. According to the notification, UPS or Sure Payment Options will not be available in the event of dismissal of an employee, avoiding jobs or resigning. The notification states that the rate of full guaranteed salary will be 50 percent of the average basic salary of 12 months before retirement, which will be under the minimum 25 years of service.
Effective from 1 April
The PFRDA said in a statement that the rules related to UPS will be applicable from 1 April 2025. These rules allow central government employees to register with NPS in service by April 1, 2025 and allow employees recruited in the services of the Central Government on or after April 1, 2025 to register with NPS.
Registration and claim form for all these categories of central government employees will be available online from April 1, 2025 on the proton CRA website. Employees also have the option to physically submit the form. Let us tell you that from this notification, 23 lakh government employees will get the option to choose one of the UPS and NPS. NPS was implemented on 1 January 2004.
OPS vs UPS
Under the Old Pension Scheme (OPS) implemented before January 2004, employees used to get 50 percent of the last basic salary of their tenure as pension. Unlike OPS, UPS is an contributor. In this, employees will have to contribute 10 percent of their basic salary and dearness allowance, while the contribution of the employer (central government) will be 18.5 percent. However, the final payment depends on the return of the stock market on the fund, which is mostly invested in government bonds.
