The Union Cabinet, under PM Narendra Modi, approved the Unified Pension Scheme (UPS) for central government employees.
Employees must complete at least 25 years of service to avail the benefits.
The scheme will benefit 2.3 million central government employees.
Union Minister Ashwini Vaishnaw clarified the scheme's details breaking it down into 10 easy points.
1. Assured Pension
Retirees will now receive 50% of their average basic pay over the last 12 months before retirement as a pension for a minimum qualifying service of 25 years. Proportionate for lesser service period upto a minimum of 10 years of service.
2. Government Contribution
The Government is increasing its contribution from 14 percent to 18.5%. Employee contribution will not increase.
3. Assured Family Pension
In case of a pensioner’s unfortunate demise, their family will receive 60% of the pension the employee was receiving.
4. Assured Minimum Pension
Rs 10,000 per month as pension, on superannuation after minimum 10 years of service.
5. Inflation Protection
Pensions will be indexed to inflation. Dearness Relief will be based on All India Consumer Price Index for Industrial Workers (AICPI-IW), as in case of serving employees.
6. Lump-Sum Payment
Lump-Sum Payment at superannuation in addition to gratuity. 1/10 th of monthly emoluments ( pay +DA) as on the date of superannuation for every completed six months of the service. This Payment will not reduce quantum of assured pension.
7. UPS Provisions
Provisions of UPS will apply to past retirees of NPS (who have already superannuated). Arrears for past period will be paid with interest at PPF rates.
8. UPS As An Option
UPS will be available as an option to the employees. Existing NPS/VRS with NPS as well as future employees will have an option of joining UPS. Choice, once exercised, will be final.
9. UPS Benefiting 23 lakh
UPS is being implemented by the Central Government benefiting nearly 23 lakh Central Government employees.
10. Same Architecture For State Govts
The same architecture has been designed for adoption by State Govts. If implemented, it could benefit over 90 lakh government employees currently enrolled in NPS.