Tuesday, February 11, 2025

New Pension Scheme for Government Staff: Benefits and Eligibility

Indian government has announced the implementation of the Unified Pension Scheme (UPS), set to take effect from April 1, 2025.

This new scheme aims to provide financial security and stability for central government employees post-retirement.

The UPS was approved by the Union Cabinet on August 24, 2024, and is designed to combine aspects of both the Old Pension Scheme (OPS) and the National Pension System (NPS).

The scheme will be applicable to central government employees already enrolled in the NPS who choose to opt for this new scheme.

Unified Pension Scheme: Eligibility and Benefits

Under the UPS, employees who retire after completing at least 10 years of service will receive an assured pension.

The scheme will provide a monthly pension equivalent to 50% of the average basic pay drawn by a central government employee during the 12 months before retirement, provided they complete 25 years of service.

Additionally, the UPS offers periodic hikes in dearness relief to keep up with inflationary trends.

For employees opting for voluntary retirement after 25 years of service, the assured payout will begin from the date they would have reached superannuation had they continued in service.

The scheme also ensures a family pension equal to 60% of the government employee’s pension in the event of their death, along with benefits like gratuity and a lumpsum superannuation payout at the time of retirement.

Implementation and Transition

The Central Government will implement the UPS, benefiting approximately 23 lakh central government employees.

Employees joining service before April 2004 will continue under the OPS, while those joining after this date will have the option to choose between the UPS and the NPS5.

The introduction of the UPS addresses long-standing demands from federal staff unions for guaranteed retirement benefits.

The scheme aims to provide greater financial security and predictability for government employees, ensuring a dignified life post-retirement.


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Sahiba Sharma
Sahiba Sharmahttps://sightsinplus.com/
Sahiba Sharma, Senior Editor - Content at SightsIn Plus