New Delhi: On Saturday, August 24, the Indian government approved the Unified Pension Scheme (UPS), which guarantees an assured pension, a minimum pension, and an assured family pension. The new scheme will be implemented from April 1 next year, offering central government employees currently under the National Pension Scheme (NPS) the option to switch to the UPS or continue with the existing scheme.
Following the Union Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw briefed the media, highlighting that the UPS will benefit approximately 23 lakh central government employees. Vaishnaw noted that the scheme was developed after extensive consultations.
Addressing concerns about the scheme’s timing, Vaishnaw clarified that the UPS announcement was not connected to upcoming assembly elections in Jammu and Kashmir and Haryana.
The UPS will include three main components:
Assured Pension: Employees will receive 50% of their average basic pay over the last 12 months before retirement, provided they have served a minimum of 25 years. For shorter service periods, the pension will be proportionate, with a minimum of 10 years required to qualify.
Assured Family Pension: This will be 60% of the employee's pension immediately before their death.
Assured Minimum Pension: Set at Rs 10,000 per month for retirees with at least 10 years of service.
Prime Minister Narendra Modi, who chaired the cabinet meeting, expressed pride in the scheme's focus on employee dignity and financial security. In a post on X, Modi praised the scheme as aligning with the government’s commitment to the well-being of its employees. Shiv Gopal Mishra, Secretary (Staff Side), National Council (Joint Consultative Machinery), commended the UPS, noting the rare opportunity for staff representatives to interact directly with the Prime Minister. He emphasized the scheme's significance for both current and retired employees.
Defence Minister Rajnath Singh also praised the UPS, highlighting its potential to provide significant financial security to central government employees and their families. Singh thanked Prime Minister Modi for the decision, describing it as a major step forward. The UPS will feature inflation indexation on assured pensions, family pensions, and minimum pensions, and will include dearness relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). Additionally, there will be a lump sum payment upon superannuation, calculated as one-tenth of the monthly emoluments (pay plus DA) for every six months of completed service, without affecting the assured pension.
Finance Minister Nirmala Sitharaman noted that the committee reviewing the NPS is making substantial progress and aims to address relevant issues while maintaining fiscal prudence to protect the interests of common citizens.
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