New Delhi: The central government has just approved a new pension plan, the Unified Pension Scheme (UPS), which will benefit around 23 lakh employees. This scheme aims to offer financial security and stability to central government employees after they retire. Here’s a look at the key features:
Assured Pension For Long-Term Service
If you work for the government for at least 25 years, you will get a guaranteed pension. This pension will be 50% of your average basic pay during the last year of your service. If you have worked less than 25 years but at least 10 years, you will get a proportionate pension based on your tenure.
Family Pension Security
If something unfortunate happens and an employee passes away, their spouse will receive a family pension. This assured amount will be 60% of what the employee was getting before their death.
Minimum Pension Guarantee
Employees with at least 10 years of service will still get a minimum pension of ₹10,000 per month when they retire. This helps ensure that even those with shorter service years have some level of financial security after retirement.
Keeping Up with Inflation
Both the assured pension and the family pension will be adjusted for inflation. This means that the amount you receive will keep up with the cost of living.
Dearness Relief Benefits
Just like current employees, retirees will also receive Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). This is to ensure that retirees’ purchasing power is maintained.
Lump Sum Payment at Retirement
In addition to gratuity, when employees retire, they will get a lump sum payment. This will be one-tenth of the employee’s monthly salary (including pay and Dearness Allowance) for every six months of service completed. Importantly, this lump sum doesn’t affect the assured pension.
Prime Minister Narendra Modi expressed his gratitude towards government employees, saying, “We are proud of the hard work of all government employees who contribute significantly to national progress. The Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future.”
The new pension scheme will initially benefit 23 lakh central government employees. This number could rise to 90 lakh if state governments decide to opt into the scheme, providing its benefits to more government employees across India.
This approval comes at a time when several non-BJP states have decided to revert to the DA-linked Old Pension Scheme (OPS), and various employee organizations are also demanding the same in other states.
The National Pension Scheme (NPS) was introduced for all government employees (except those in the armed forces) who joined after January 1, 2004. It replaced the OPS, where retired employees received 50% of their last drawn salary as a monthly pension. The OPS had the downside of increasing financial burdens on the government since it wasn’t contributory.
Most state and Union Territory governments have also adopted the NPS for their new employees.
In summary, the Unified Pension Scheme (UPS) offers several benefits to central government employees and their families, aiming to ensure financial stability and security post-retirement. This move showcases the government’s effort to safeguard the future of those who serve the nation.
