Major changes to the pension were announced by the Union Cabinet on Saturday reintroducing the concept of assured pension which was discontinued for the new joiners many years ago. The Unified Pension Scheme (UPS) will come into effect from April 1, 2025, which carries similar features to the Old Pension Scheme (OPS). The revised scheme will provide an assured pension of 50 per cent of the last withdrawn salary considering the basic pay of 12 months, with a retirement benefit for all employees who complete 25 years of service.
In addition to their retirement benefits, employees will receive deferred compensation that is fully indexed to inflation, ensuring its value keeps pace with rising costs and the pensioner’s spouse will be entitled to a guaranteed payout of 50% of the last drawn pension after the pensioner’s passing.
Also, read| Union Cabinet Approves Unified Pension Scheme (UPS): 5 Important Points
This may ensure a guaranteed pension for 23 lakh central government employees. Prime Minister Narendra Modi and Union Home Minister Amit Shah have praised the scheme, highlighting its significance for government employees’ financial security and well-being.
Unified Pension Scheme: 10 points
- 50% of average basic pay for the last 12 months for retirees with 25 years of service, proportionate for less.
- Increased from 14% to 18.5%, no change in employee contribution.
- 60% of the pension for the family if the pensioner passes away.
- Minimum Pension: Rs 10,000 per month after a minimum of 10 years of service.
- Pensions linked to inflation via AICPI-IW.
- Additional lump-sum at retirement, not affecting assured pension.
- Applies to past NPS retirees with arrears paid with PPF interest.
- Existing NPS/VRS employees and future employees can opt for UPS, with a one-time final choice
- Potentially benefits 90 lakh employees if adopted by the state government
Shiv Gopal Mishra, Secretary of the Joint Consultative Machinery (JCM), hailed the meeting with Prime Minister Narendra Modi as a “proud moment” for 32 lakh government employees it was the first time JCM was invited by the PM to discuss the Unified Pension Scheme.
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.…
— Narendra Modi (@narendramodi) August 24, 2024
On the contrary, Mallikarjun Kharge the president of the Indian National Congress, slammed the government saying that the‘U’ in UPS stands for the Modi Govt’s U-turns and that his party is indirectly getting benefitted by paying his employees in the name of such schemes.
The ‘U’ in UPS stands for Modi Govt’s U-turns!
Post June 4, the power of the people has prevailed over the arrogance of power of the Prime Minister.
— Rollback in the budget regarding Long Term Capital Gain / Indexation
— Sending Waqf Bill to JPC
— Rollback of Broadcast… pic.twitter.com/DJbDoEyl6g
— Mallikarjun Kharge (@kharge) August 25, 2024