Come April 2025 and government employees can opt for the Unified Pension Scheme (UPS) if they so wish, as it will be available as an option under the National Pension System (NPS). An official notification has been issued to this effect by the Ministry of Finance.
All government employees covered under the NPS can either continue with the NPS as it is, or opt for the UPS option if they so wish.
The scheme will benefit 23 lakh Central government employees, that is, all those who have completed at least 10 years of service, in which case they are guaranteed a minimum pension of Rs 10,000 per month. The full benefits of the scheme, however, will only apply to those who have completed at least 25 years of service.
Simply put, assured pension will be given only if the employee has retired after completing ten years of service till the date of superannuation. It will also be paid in the case of voluntary retirement post completion of a minimum tenure of 25 years (continuous service) till the date of retirement. It will be paid in cases where the government retires the employee under the provisions of FR 56 (which does not fall under penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965) from the date of such retirement.
As per the notification, the assured payout will not be available if the employee has been terminated or removed from service or has resigned.
Fifty per cent of their average basic pay over the last 12 months before retirement will be paid as a pension to the employees under the UPS.
On retirement, the employees will be given a lumpsum amount along with gratuity. This amount will be equal to a tenth of the monthly salary, including pay and DA, as on the date of retirement for every six months of completed service. This amount will not affect the assured pension amount in any way.
The National Pension System or NPS is a contributory pension system wherein contributions from subscribers are matched by contributions from the government as an employer. These contributions are collected and accumulated in an individual pension account of the employee.
