Unified Pension Scheme Particulars: The Union Cupboard on August 24 delivered a major enhance to 23 lakh central authorities staff by approving a assured pension of fifty% of their wage for individuals who joined the service after January 1, 2004, beneath the Nationwide Pension System (NPS).
Addressing the longstanding calls for of presidency staff, the Cupboard, led by Prime Minister Narendra Modi, accepted the Unified Pension Scheme (UPS), which ensures this assured pension.
Unified Pension Scheme Eligibility
Workers who select the Unified Pension Scheme can be entitled to a assured pension of fifty% of the common fundamental pay earned over the past 12 months earlier than retirement, supplied they’ve a minimal qualifying service of 25 years.
For these with a shorter service interval, right down to a minimal of 10 years, the pension can be proportionally adjusted, in line with Info and Broadcasting Minister Ashwini Vaishnaw.
5 Options Of Unified Pension Scheme In India
1. Assured pension: 50% of the common fundamental pay drawn over the past 12 months previous to superannuation for a minimal qualifying service of 25 years. This pay is to be proportionate for a lesser service interval upto a minimal of 10 years of service.
2. Assured household pension: @60% of the pension of the worker instantly earlier than her/his demise.
3. Assured minimal pension: @10,000 per thirty days on superannuation after a minimal of 10 years of service.
4. Inflation indexation: on assured pension, on assured household pension and warranted minimal pension
Dearness Reduction primarily based on the All India Shopper Worth Index for Industrial Employees (AICPI-IW) as within the case of service staff
5. Lump sum cost at superannuation along with gratuity
1/tenth of month-to-month emoluments (pay + DA) as on the date of superannuation for each accomplished six months of service
This cost is not going to scale back the quantum of assured pension
Unified Pension Scheme Options and Advantages; Particulars
The brand new pension scheme additionally ensures an assured minimal pension of Rs 10,000 per thirty days on superannuation after a minimal of 10 years of service.
He stated this selection scheme will profit 23 lakh central authorities staff, including that the quantity would rise to 90 lakh if state governments wish to be part of the scheme.
Saying different options of UPS, Vaishnaw stated an assured household pension can be supplied to the partner of a deceased worker. As well as, there could be inflation indexation on assured pension, assured household pension, and warranted minimal pension.
There can be Dearness Reduction primarily based on the All India Shopper Worth Index for Industrial Employees (AICPI-IW) as within the case of serving staff, the minister stated.
Along with gratuity, he stated, staff on the time of retirement could be eligible for a lump sum quantity — 1/tenth of month-to-month emolument (pay + DA) as on the date of superannuation for each accomplished six months of service.
Scheme Date
The brand new scheme can be relevant from April 1, 2025.
The advantages of the Unified Pension Scheme will apply to those that are retired or retiring beneath the NPS until March 31, 2025. They are going to be eligible for arrears.
Unified Pension Scheme Worker Contribution
There wouldn’t be a further burden on staff choosing UPS. The worker’s contribution would stay 10 %, whereas the federal government contribution would go from 14 % to 18.5%.
Expenditure for arrears could be Rs 800 crore roughly, and Rs 6,250 crore extra burden on the federal government for the improved contribution of 18%.
Unified Pension Scheme For State Authorities Workers
If the state authorities joins UPS, they might bear the extra burden for these staff for the assured pension.
Transformation of NPS
Unified Pension Scheme vs Nationwide Pension Scheme
With the addition of all these options, it marks the transformation of the Nationwide Pension System (NPS), which promised pensions primarily based on the contribution made by staff and the federal government.
NPS has been applied for all authorities staff besides these within the armed forces becoming a member of the central authorities on or after January 1, 2004.
Most state/Union Territory governments have additionally notified NPS of their new staff.
Outdated Pension Scheme
Underneath the Outdated Pension Scheme (OPS), retired authorities staff acquired 50 % of their final drawn wage as month-to-month pensions. The quantity retains growing with the hike within the DA charges. OPS isn’t fiscally sustainable as it’s not contributory, and the burden on the exchequer retains mounting.
To enhance the pension system for presidency staff, the finance ministry final yr arrange a committee beneath Finance Secretary TV Somanathan to overview the pension scheme for presidency staff and counsel any modifications, if wanted, within the mild of the present framework and construction of the Nationwide Pension System.
