Unified Pension Scheme: UPS scheme will be implemented from April 1, know who will get the benefit

Unified Pension Scheme: The Integrated Pension Scheme, also known as the Unified Pension Scheme, will be introduced by the federal government on April 1. It will be particularly advantageous for workers who want a fixed income upon retirement. It is important to remember that the government formally declared the Unified Pension program on January 24 as a National Pension System alternative. The program will now go into effect on April 1, 2025. Only government workers who are currently enrolled with NPS will be eligible for UPS. Government workers will be able to choose between UPS and NPS.

Tell us how we may profit from it

The Unified Pension Scheme (UPS): What is it? Let’s start by explaining what UPS is. Therefore, let us inform you that central workers of UPS will now get a fixed pension, which is equal to 50% of their average basic income for the 12 months prior to their retirement. The employee must have worked for at least 25 years in order to be eligible for this pension. However, the family will also continue to receive a set pension in the event of the employee’s death, which is equal to 60% of his pension. In addition, a minimum guaranteed pension would be provided, meaning that those who work for ten years will get a pension of at least Rs 10,000.

To what extent will the government contribute?

The government contributes 14 percent to the New Pension Scheme (NPS), while the employee must contribute 10 percent of his base pay. At the same time, the government’s contribution to the UPS, which will be put into effect on April 1, 2025, will be 18.5% of the employee’s base pay. About 23 lakh workers would profit from the introduction of this single pension plan, and the government treasury will bear an extra cost of Rs 6250 crore in the first year.

Pensions will rise in line with inflation

The Unified Pension Scheme now includes indexation as well. This implies that retired workers’ pensions will continue to rise in line with inflation. The pension will be increased in order to offset inflation. The All India Consumer Price Index for Industrial Workers will serve as the foundation for the calculation. In addition, a lump sum payment will be made upon retirement.

Who is going to gain from this plan?

The government announced the Unified Pension Scheme for Central personnel covered by NPS on January 25, 2025. Such Central Government workers who fall under the National Pension Scheme (NPS) and choose UPS under it would be covered by the Unified Pension Scheme. Those that choose UPS will not be eligible for any further cash benefits, policy changes, or concessions.