New Delhi, 24th August 2024: The Union Cabinet, chaired by Prime Minister Narendra Modi, has given its approval to the Unified Pension Scheme (UPS), a significant reform aimed at ensuring financial security for government employees post-retirement. The new scheme, which was greenlit on Saturday, introduces a range of benefits designed to provide stability and predictability to retirees and their families.
Key Features of the Unified Pension Scheme (UPS):
1. Assured Pension: Under the UPS, retirees will receive a pension amounting to 50% of their average basic pay drawn during the last 12 months before superannuation. This benefit is guaranteed for employees with a minimum of 25 years of qualifying service. For those with less than 25 years of service but at least 10 years, the pension will be proportionally adjusted.
2. Family Pension: In the event of an employee’s demise, the scheme ensures that the surviving family members will receive 60% of the pension that the employee was entitled to immediately before their passing.
3. Minimum Pension Guarantee: The UPS guarantees a minimum pension of ₹10,000 per month for employees who have completed at least 10 years of service upon retirement.
4. Inflation Indexation: To protect the pensioners from inflation, the assured pension, family pension, and minimum pension will be indexed to inflation. Adjustments will be made based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to the adjustments provided to current service employees.
5. Dearness Relief: Pensioners under the UPS will be entitled to Dearness Relief, calculated based on the AICPI-IW, ensuring that their pension keeps pace with the rising cost of living.
6. Lump Sum Payment: In addition to the regular pension and gratuity, retirees will receive a lump sum payment at the time of superannuation. This payment will be equivalent to 1/10th of their monthly emoluments (basic pay + DA) for every six months of completed service. Importantly, this payment will not affect the amount of the assured pension.
The introduction of the Unified Pension Scheme is part of the government’s broader effort to enhance the social security net for its employees, offering them greater financial certainty in retirement. The scheme is expected to provide much-needed relief to retirees and their families, ensuring that they can maintain a decent standard of living post-retirement.
The UPS is set to be implemented across various government sectors, with the details of its rollout to be announced in the coming weeks.