There has been a big change in the rules of the Unified Pension Scheme, know the details
Unified Pension Scheme: For central government workers, the Finance Ministry has announced the Unified Pension Scheme (UPS) as a choice under the National Pension System (NPS). The plan will go into force on April 1, 2025.
Eligibility for the Scheme
Employees of the central government covered by the National Pension System (NPS) are eligible for the Unified Pension Scheme (UPS). The plan only offers guaranteed rewards in certain situations. For instance, the system will guarantee compensation to workers who have worked for ten or more years, retire without penalty under FR 56(j), or take voluntary retirement after twenty-five years of service. However, in the event of resignation, dismissal, or removal from service, this compensation will not be applicable.
Benefits of the Unified Pension Plan
UPS offers its workers guaranteed retirement benefits. A reimbursement of 50% of their average basic wage over the previous 12 months is guaranteed to employees who have worked for more than 25 years. A minimum monthly payout of ₹10,000 would be given to employees who have worked for more than ten years. The spouse of the employee will get 60% of the family benefit if the employee passes away after retirement. In addition, workers will get a lump sum payout equal to 10% of their base pay and dearness allowance when they retire.
Structure for employee contributions
Under the UPS plan, workers will be able to donate to two different kinds of funds. The first is the individual fund, to which the government and workers will each contribute 10% of their base pay and DA. The second is the pool fund, to which the government will put 8.5% of the base pay and DA. This pool fund’s objective is to support guaranteed payments. While the government will oversee the pool fund’s investments, employees will have the chance to choose the investment choice for their individual funds.
There is yet a choice
NPS central staff have the option of staying with NPS or switching to UPS. Their decision will be final and binding if they decide on UPS. Employees who join UPS will get guaranteed retirement benefits, securing their future.
Special considerations for former retirees
Employees who retired under NPS prior to UPS’s founding are likewise eligible for benefits under the UPS plan. These workers will also profit from the plan by receiving a monthly top-up after arrears, early withdrawals, and encryptions with PPF interest rates.
UPS scheme operation
In order to get guaranteed payment under this plan, workers will need to transfer their NPS money to UPS. Employees will be required to make up the difference if their personal funds fall short of the standard amount. An employee will get a refund if their personal money exceeds the amount. The Pension Fund Regulatory and Development Authority will release comprehensive rules and regulations for the UPS system, which will go into effect on April 1, 2025.
