The Union Cabinet approved the Unified Pension Scheme (UPS), ensuring that government employees receive 50% of their pay in the form of pension.
Reetu | Aug 27, 2024 |
Modi Govt’s New Unified Pension Scheme; How this Pension Scheme is different from NPS?
The Union Cabinet approved the Unified Pension Scheme (UPS) on Saturday (August 24), ensuring that government employees receive 50% of their pay in the form of pension.
Union Minister Ashwini Vaishnaw revealed that the newly approved UPS would have two pillars: a 50% assured pension and an assured family pension.
The scheme is intended to benefit approximately 230,000 central government employees, with the potential to increase to 900,000 if state governments adopt it, bringing its advantages to more government employees across India.
Furthermore, employees will be able to choose between the existing National Pension System (NPS) and the new UPS.
Vaishnaw further stated that the Centre has constituted a committee that held 100 meetings with key organisations, including the Reserve Bank of India (RBI) and the World Bank, to finalise the scheme’s structure.
Earlier on Sunday (August 25), Business Standard reported that the Department of Expenditure (DoE) of the Ministry of Finance is expected to produce an operational framework for the UPS’s implementation. This framework will explain processes for a variety of situations, including those who retired through the NPS and made partial withdrawals from their annuity.
Prime Minister Narendra Modi lauded the UPS, saying that it will bring dignity and financial stability to government employees. In a post on Twitter, he wrote, “We are proud of the hard work of all government personnel who contribute considerably to national progress. The Unified Pension Scheme provides dignity and financial security to government employees, consistent with our commitment to their well-being and a secure future.”
The UPS seeks to strike a balance between budgetary policy and employee benefits. It mixes a defined benefit pension comparable to the Old Pension Scheme (OPS) with the NPS’s contributed structure.
Assured Pension: Government employees with at least 25 years of service will get a guaranteed pension equivalent to 50% of their average basic pay for the previous 12 months before to retirement. Those with fewer years of service will get a pension proportional to their tenure, with a minimum qualifying service of ten years.
Assured Family Pension: In the tragic case of an employee’s death, their spouse will get a family pension equal to 60% of the pension the person was earning.
Assured Minimum Pension: Employees with at least ten years of service will be eligible for a monthly pension of Rs.10,000.
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