Union Cabinet Approves Unified Pension Scheme (UPS): 5 Important Points

The Union Cabinet, led by Prime Minister Narendra Modi, has approved a new Unified Pension Scheme (UPS), which is “set to benefit government employees” after they retire. The scheme guarantees a steady pension, provides for family pensions, and takes inflation into account to ensure that payments remain stable over time.

Under the new system, retiring employees will receive 50% of their average basic pay from their last 12 months of service, provided they have worked for at least 25 years. Even those with shorter service periods, with a minimum of 10 years, will receive a proportionate pension. In the unfortunate event of an employee’s death, their family will be entitled to 60% of the pension the employee was receiving at the time of death. The government also guarantees a minimum pension of ₹10,000 per month, even for those with just 10 years of service. On top of these benefits, pensions will be adjusted for inflation, ensuring that retirees don’t lose value due to rising costs of living.

In addition to regular pensions and gratuity, employees will also receive a lump sum payment upon retirement. This payment will not affect their overall pension entitlement.

Unified Pension Scheme (UPS): 5 Important Points

1. Employees will receive 50% of their average basic pay from the last 12 months of service, if they have completed at least 25 years.
2. Family pensions will amount to 60% of the employee’s pension immediately before their death.
3. The scheme guarantees a minimum pension of ₹10,000 per month after 10 years of service.
4. Pensions, including family pensions and minimum pensions, will be adjusted for inflation based on the All India Consumer Price Index for Industrial Workers.
5. Retirees will also receive a lump sum payment, which will not reduce their guaranteed pension.

After the announcement, Prime Minister Narendra Modi said the Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future.

Met a delegation of staff side from the Joint Consultative Machinery for Central Government employees. They expressed joy on the Cabinet’s decision regarding the Unified Pension Scheme. pic.twitter.com/kRNqpPgDXe

— Narendra Modi (@narendramodi) August 24, 2024

Defence minister called it a significant move that promises an assured pension for the central government employees and said the scheme will benefit lakhs of central government employees and provide financial security to them and their families.