Unified Pension Scheme (UPS)

✦Key Features

• Assured Pension: 50% of average basic pay of last 12 months for 25+ years service; proportionate for 10-25 years
• Minimum guaranteed pension: ₹10,000/month for those with 10+ years of service
• Family pension: 60% of employee's pension to spouse on death
• Inflation indexation: Dearness Relief linked to AICPI-IW (CPI for Industrial Workers)
• Lump sum: 1/10th of monthly emoluments per 6 months served (in addition to gratuity)
• Contributions: Employee 10% + Government 18.5% of basic pay + DA (raised from 14%)
• Voluntary opt-in for existing NPS subscribers (deadline Sep 30, 2025); ~23 lakh central employees covered

✓Eligibility Criteria

• Central Government employees who are currently enrolled in the National Pension System (NPS)
• A minimum qualifying service period of 10 years is required for a proportionate monthly pension
• Requirement of at least 25 years of service to avail the full assured pension benefit
• Inclusion of past retirees who joined after January 2004 and meet the service criteria

★Benefits

• Assured pension amounting to 50% of the average basic pay drawn in the last 12 months
• Assurance of a minimum pension of ₹10,000 per month for those with at least 10 years of service
• Family pension set at 60% of the employee's pension amount in the event of their demise
• Inflation protection via Dearness Relief (DR) calculated based on the Consumer Price Index

▶Application Process

• Eligible NPS subscribers must exercise a one-time option to switch from NPS to UPS
• Submit the digital or physical option form through the respective Drawing and Disbursing Officer
• Internal audit and verification of the total service length and contribution history by the department
• Final approval and issuance of the revised pension eligibility certificate by the pension department

₹ Budget Allocation

800

Funding Ratio (Centre:State): Contributory: 10% Employee; 18.5% Central Government.

Historical Context

Approved in August 2024 to address widespread protests by government employees against the NPS (National Pension System) and the demand for return to OPS.

Sub-Schemes

Challenges

• Managing the transition for employees already under NPS.
• Long-term fiscal liability due to inflation-indexed dearness relief (DR).
• Potential demands from state government employees to replicate the model.
• Ensuring the 18.5% government contribution doesn't crowd out developmental spending.

Reforms & Recommendations

• Creating a dedicated 'Pension Stabilization Fund' to manage future DR liabilities.
• Periodic actuarial reviews every 5 years to ensure fund solvency.

Performance Statistics

SDG Linkages

Constitutional Backing

Technology Used

Success Stories

Key Takeaways

• Assured Pension: 50% of average basic pay (last 12 months).
• Assured Family Pension: 60% of employee's pension.
• Assured Minimum Pension: ₹10,000 per month after 10 years service.
• Inflation Indexation: Dearness Relief (DR) provided based on AICPI-IW.

Convergence Schemes

• National Pension System (NPS)
• EPFO

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