UPS Pension Scheme 2025 – Eligibility, Benefits and Returns

UPS Pension Scheme 2025: The Central Government introduced the Unified Pension Scheme (UPS) on 24 August 2024. The UPS scheme is set to begin on April 1, 2025, and it is projected to benefit 23 lakh Central Government employees. Learn all about the recently created UPS plan, including its specifics and benefits.

UPS Pension Scheme Details

What is the Unified Pension Scheme?

The Central Government has introduced the Unified Pension Scheme (UPS) for government employees. It seeks to give government employees stability, dignity, and financial security after retirement, ensuring their well-being and a secure future.

Currently, government personnel are covered by the National Pension System (NPS). These employees can continue with NPS or switch to the UPS plan. However, once employees choose UPS, the decision is final and cannot be reversed.

State governments can also adopt and execute the UPS plan for their personnel. Maharashtra was the first state to use UPS. The Maharashtra cabinet voted to implement the UPS system for state government employees on August 25, 2024.

If all states embrace the UPS system, it may benefit more than 90 lakh government employees who are currently covered by the NPS scheme in India.

UPS Pension Scheme Eligibility Criteria

• Government personnel with at least ten years of service are entitled to a fixed pension.
• Government employees with at least 25 years of service are entitled to a pension equal to a percentage of their average basic pay.
• Government employees who are covered by the National Pension System (NPS) and who choose the Voluntary Retirement Scheme (VRS) under NPS.

UPS Scheme Minimum Pension Amount

The UPS offers a minimum monthly pension of Rs. 10,000 to government employees who retire after at least ten years of service.

UPS Pension Scheme Benefits

Assured pension: Retired employees will get a pension equal to 50% of their average basic wage for the previous 12 months. This perk is available to employees who have at least 25 years of service. Employees with shorter service durations receive proportionate pension benefits (10 to 25 years).

Government contribution: The government will pay 18.5% of the employee’s base salary into the pension fund. Employees will contribute 10% of their base salaries to the pension fund.

Assured family pension: In case of the pensioner’s death, 60% of the pension immediately before the retiree’s demise will be given to her/his spouse.

Assured minimum pension: An employee with at least ten years of service will be paid Rs. 10,000 per month upon superannuation.

Inflation indexation: Inflation indexation will be applied to promised pension, assured minimum pension, and ensured family pension. The Dearness Relief (DR) would be based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), which is used for service employees.

Lump sum payment: Retirees will get a lump sum payout in addition to their gratuity at the time of superannuation. This amount will be one-tenth of the monthly emoluments (pay + DA) on the superannuation date for every six months of service completed. It will not diminish the amount of the assured pension.

UPS Pension Scheme Returns

The UPS system ensures that government employees receive an assured pension sum when they retire. Employers will contribute 18.5% of the basic income + dearness allowance each month, while employees will contribute 10%.

Employees who have retired after a minimum of 25 years of service will get a pension equal to 50% of their average basic pay for the previous 12 months. Employees who have retired after a minimum of ten years of service receive a monthly pension of Rs. 10,000.

UPS Pension Scheme Important Links