Unified Pension Scheme (UPS) Approved by Union Cabinet. Download UPS Approval circular in PDF.
On August 24, 2024, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the Unified Pension Scheme (UPS). This landmark decision marks a significant step in providing financial security to government employees post-retirement. The scheme introduces a set of assured benefits that ensure a dignified life after superannuation, with features tailored to meet the evolving needs of retirees and their families.
Salient Features of the Unified Pension Scheme (UPS)
Assured Pension:
- Eligibility: The scheme promises an assured pension of 50% of the average basic pay drawn over the last 12 months prior to superannuation. This benefit is available for employees with a minimum qualifying service of 25 years.
- Proportionate Pension for Lesser Service: For employees who have completed less than 25 years but more than 10 years of service, the pension will be proportionate to the service period.
Assured Family Pension:
- Percentage of Pension: In the unfortunate event of an employee's demise, the family will receive an assured family pension amounting to 60% of the pension that the employee was entitled to immediately before passing away. This ensures continued financial support for the family.
Assured Minimum Pension:
- Minimum Pension Amount: Regardless of the service duration, the scheme guarantees a minimum pension of ₹10,000 per month for employees who retire after completing a minimum of 10 years of service. This provision is a safety net ensuring that all retirees have a basic income to rely on.
Inflation Indexation:
- Dearness Relief (DR): The scheme includes inflation indexation on the assured pension, family pension, and minimum pension. This will be done through Dearness Relief (DR) adjustments based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), ensuring that pensioners' incomes keep pace with the rising cost of living.
- Protection Against Inflation: The inflation indexation is aligned with the DR provided to serving employees, thereby protecting retirees and their families from the adverse effects of inflation.
Lump-Sum Payment at Superannuation:
- Additional Benefit: Upon retirement, employees will receive a lump-sum payment in addition to the gratuity. This payment will be 1/10th of the monthly emoluments (including pay and DA) as on the date of superannuation for every completed six months of service.
- No Impact on Pension: Importantly, this lump-sum payment will not affect the quantum of the assured pension, ensuring that retirees receive the full benefit of their pension entitlement.
Conclusion
The Unified Pension Scheme (UPS) represents a comprehensive approach to ensuring financial security for government employees post-retirement. With assured benefits including pension, family pension, minimum pension, and inflation protection, the scheme addresses the critical needs of retirees in a systematic and thoughtful manner. The additional lump-sum payment at superannuation further enhances the financial well-being of pensioners, allowing them to lead a comfortable life after years of dedicated service.
This initiative by the government reflects its commitment to providing a robust and sustainable pension system that upholds the dignity of its employees in their retirement years.
