UPS Pension Scheme: The Cabinet approved the Unified Pension Scheme (UPS) which will be set to take effect on April 1, 2025. It ensures that Government employees will get a guaranteed pension equivalent to 50% of the average basic pay drawn over the last 12 months before retirement. This scheme is approved for around 23 lakh central government employees. With the 2024 revisions and updates, this scheme has gained significant attention. Continue to read more about the UPS pension scheme, its benefits, and how it differs from other pension schemes like the Old Pension Scheme (OPS) and the National Pension System (NPS).

What is the UPS Pension Scheme?

The UPS Full Form is the Unified Pension Scheme (UPS). The Unified Pension Scheme (UPS) is designed to provide a stable retirement income for government employees. Under this scheme, retirees will receive 50% of their average basic pay from the last 12 months of service. The government’s contribution to the scheme is increasing from 14% to 18.5%, though employee contributions remain unchanged. 

In case of a retiree’s death, their family will receive 60% of the pension. Additionally, there is an assured minimum pension of ₹10,000 per month for those who retire after at least 10 years of service.

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Unified Pension Scheme Eligibility

The NDA has launched the UPS Scheme for Central Government Employees to provide a reliable retirement income for government employees. To be eligible for this scheme, employees must meet certain service criteria:

1. Minimum Service Requirement: UPS Scheme for Central Government Employees who have completed at least 25 years of service are eligible for a pension equal to 50% of their average basic pay from the last 12 months before retirement.
2. Proportionate Pension: For employees who have served between 10 and 25 years, the assured minimum pension of ₹10,000 per month on superannuation after a minimum of 10 years of service. 

Key Features of the UPS Pension Scheme

The UPS Pension Scheme encompasses several key features that differentiate it from other pension schemes:

• Assured Pension: Retirees will receive 50% of their average basic pay from the last 12 months before retirement if they have completed at least 25 years of service. If they have served less than 25 years but at least 10 years, the pension will be a proportional amount based on their service duration.
• Assured Family Pension: If a retiree passes away, their family will receive 60% of the pension that the retiree was getting.
• Assured Minimum Pension: Retirees will receive a minimum pension of ₹10,000 per month if they retire after completing at least 10 years of service.
• Inflation Indexation: The pension, family pension, and minimum pension will be adjusted for inflation based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) to help maintain their value over time.
• Lump Sum Payment: At the time of retirement, employees will receive a lump sum payment in addition to their gratuity. This amount is equal to 1/10th of their monthly salary (including pay and dearness allowance) for every six months of completed service. This lump sum payment will not affect the amount of the assured pension.

How is UPS Calculated?

Under the UPS, if you complete 25 years or more of service, you’ll receive a pension equal to 50% of your average salary from the last 12 months before retirement. This pension will be adjusted for inflation through dearness allowance. UPS is calculated based on the following key 

• Average Salary is the average of the last few years’ salary.
• Pensionable Service is the total number of years served.
• Pension Factor is a percentage determined by the scheme.

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You can find online UPS Pension Scheme Calculators to know how is UPS Calculated.

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