Unified Pension Scheme for Government Employees: The Central Government has unveiled a new Unified Pension Scheme (UPS) for government employees, which is the option of National Pension System (NPS). The scheme will be provided a fixed and stable pension to the employees after retirement, including a minimum guarantee of a minimum of Rs 10,000 per month. At the same time, the amount of pension in NPS depends on market fluctuations.
Date of implementation:
UPS will be effective from 1 April 2025. Note that if an employee chooses UPS leaving NPS, he will not have the option to return to NPS in future. This scheme is available only to employees who are currently included in NPS under the Central Government.
Pension calculation method:
Pension in UPS will be calculated from the following formula:
Pension = 50% × (Total of Basic Salary of last 12 months / 12)
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25 years or more service:
If an employee’s service is 25 years or more, then he will get full pension according to the formula. -
Service less than 25 years:
If the service period is less than 25 years, the pension figure will be reduced to the ratio of service.
Example:
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Complete pension (25+ year service):
- Average Basic Salary: Rs 1,00,000
- Pension: 50% × 1,00,000 = 50,000 rupees per month
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Low service period (less than 25 years):
- Average Basic Salary: Rs 1,00,000
- Service period: 20 years
- Pension: 50% × 1,00,000 × (20/25) = Rs 40,000 per month
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Minimum Guarantee Pension:
- Average Basic Salary: Rs 15,000
- Pension from formula: Rs 7,500, but will get pension of Rs 10,000 per month as per the minimum guarantee.
This new unified pension scheme will receive a stable and safe pension to government employees, especially beneficial for those who want to avoid market -based risk.
