Union Cabinet Approves Unified Pension Scheme: Know All About It Here

The central government approved the Unified Pension Scheme (UPS) on Saturday, 24 August, informed Union Minister Ashwini Vaishnaw in a press briefing.

Under this scheme 50 per cent of the salary is guaranteed as pension for government employees. The UPS will come into effect from 1 April, 2025.

While the National Pension Scheme (NPS) will continue to remain an option, all employees who have joined service since 2004, including those who may have retired since then, will be provided an option to switch over to the UPS regime.

Vaishnaw explained that approximately 23 lakh central government employees would benefit from the UPS, and would have an option to choose between the National Pension System (NPS) and the new scheme.

The scheme consists of three main parts:

1. A 50 per cent assured pension

2. An assured family pension

3. An assured minimum pension

Assured pension

Contributory But Capped

The UPS will be a contributory scheme, with employees’ contributing 10% of salary and the government contributing in 18.5% of salary. The government may adjust its contribution (higher or lower) based on periodic actuarial assessments about the funding requirements to meet the UPS obligations.

Assured family pension

If an employee passes away, 60 per cent of the pension they were receiving prior to their death will be provided to their family.

Assured minimum pension

A minimum pension of Rs 10,000 a month has been promised for those who complete at least 10 years of central government service.

The last change in central government's pension system was brought by the Vajpayee government under the New Pension System (NPS). This was based on a contributory model and was applicable to employees who joined the government employment after 1 April, 2004.

The Modi government's move comes at a time when the Congress party has promised to implement the old pension scheme in many recent election campaigns.