UPS scheme is designed to provide a comprehensive and secure pension plan for Central government employees by combining the best features of the Old Pension Scheme (OPS) and the National Pension System (NPS).
What is UPS? Unified Pension Scheme 2024
The Union Cabinet, led by Prime Minister Shri Narendra Modi, has approved a new pension plan known as the Unified Pension Scheme (UPS). This scheme is designed to provide a comprehensive and secure pension plan for Central government employees by combining the best features of the Old Pension Scheme (OPS) and the National Pension System (NPS).
What is UPS? Continue Reading this
Key Features of the UPS:
Assured Pension:
- Retirees will receive 50% of their average basic pay from the last 12 months before retirement as their pension.
- This assured pension is available for employees with a minimum of 25 years of service. For those with less service (but at least 10 years), the pension amount will be proportionate.
Government Contribution:
- The government’s contribution to the pension will increase from 14% to 18.5%.
- Employees’ contributions will remain unchanged.
Assured Family Pension:
- The unfortunate event of a pensioner’s demise, their family will receive 60% of the pension the employee was drawing.
Assured Minimum Pension:
- The scheme guarantees a minimum pension of ₹10,000 per month for retirees with at least 10 years of service.
Inflation Protection:
- Pensions will be adjusted for inflation. The adjustment will be based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to the adjustments made for current government employees.
Lump-Sum Payment:
- Upon retirement, employees will receive a lump sum payment in addition to their gratuity.
- This payment will be 1/10th of their monthly salary (including Dearness Allowance) for every completed six months of service. Importantly, this lump sum will not reduce the amount of the assured pension.
UPS Provisions for Past Retirees:
- Those who have already retired under the NPS will benefit from the UPS. They will receive arrears for the past period with interest calculated at Public Provident Fund (PPF) rates.
UPS as an Option:
- Current NPS participants, employees retiring under the Voluntary Retirement Scheme (VRS), and future employees can choose to opt into the UPS. However, once this choice is made, it cannot be changed.
Central Government Implementation:
- The Central Government will implement the UPS, benefiting 23 lakh Central Government employees.
State Government Adoption:
The same framework is available for adoption by State Governments. If adopted, it could benefit over 90 lakh government employees who are currently under the NPS.
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This new pension scheme is designed to ensure a secure and predictable retirement for government employees,
providing them with greater financial stability in their later years.
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FAQ About What is UPS?
What is UPS? Unified Pension Scheme:
Unified Pension Scheme (UPS) – Frequently Asked Questions (FAQ)
Q1: What is the Unified Pension Scheme (UPS)?
A1: The UPS is a new pension plan approved by the Union Cabinet, led by Prime Minister Shri Narendra Modi. It is designed for Central government employees and combines the best features of the Old Pension Scheme (OPS) and the National Pension System (NPS) to provide assured pensions, family pensions, inflation adjustments, and other benefits.
Q2: Who is eligible for the UPS?
A2: All Central government employees who retire on or before March 31, 2025, are eligible for the UPS. Additionally, those currently in the NPS and new employees can opt into the UPS, but once the choice is made, it cannot be changed.
Q3: How much pension will I receive under the UPS?
A3: The pension amount under UPS is 50% of the average basic pay drawn over the last 12 months before retirement for those with a minimum of 25 years of service. For those with less than 25 years (but at least 10 years) of service, the pension is proportionate. There is also a guaranteed minimum pension of ₹10,000 per month.
Q4: What happens to my family if I pass away?
A4: In the unfortunate event of a pensioner’s death, the family will receive 60% of the pension that the pensioner was receiving.
Q5: Will my pension be protected against inflation?
A5: Yes, the pension will be indexed to inflation. The Dearness Relief will be adjusted based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), just as it is for serving employees.
Q6: Is there any additional payment besides the pension?
A6: Yes, at the time of retirement, employees will receive a lump-sum payment in addition to their gratuity. This payment is 1/10th of the monthly salary (including Dearness Allowance) for every completed six months of service. This will not reduce the assured pension amount.
Q7: What if I’m already retired under the NPS?
A7: If you have already retired under the NPS, you can still benefit from the UPS. You will receive arrears for the past period with interest at Public Provident Fund (PPF) rates.
Q8: Can private sector employees join the UPS?
A8: No, the UPS is specifically designed for Central government employees and does not apply to private sector employees.
Q9: What are the benefits of choosing the UPS over the NPS?
A9: The UPS provides assured pensions, family pensions, and protection against inflation, which are not guaranteed under the NPS. It integrates the best features of both OPS and NPS, offering greater financial security.
Q10: Will State Government employees benefit from the UPS?
A10: The UPS framework is available for adoption by State Governments. If adopted, it could benefit over 90 lakh State Government employees currently under the NPS.
This FAQ section should help clarify the key points of the Unified Pension Scheme (UPS) for a general audience.
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