The finance ministry on Saturday notified the operationalization of the Unified Pension Scheme (UPS) as an option under the National Pension System (NPS) for central government employees, effective from April 1. This new scheme will guarantee retirement benefits for employees.
“The Unified Pension Scheme shall apply to Central Government employees who are covered under the National Pension System and who choose this option under the National Pension System,” the finance ministry said in a statement.
“Pension Fund Regulatory and Development Authority (PFRDA) may issue regulations for operationalizing the UPS. The effective date for operationalization of the Unified Pension Scheme shall be April 1, 2025,” the statement added.
The new Unified Pension Scheme (UPS) will offer 50% of the average basic pay drawn by a Central government employee during the 12 months prior to retirement, provided they complete 25 years of service.
Employees with less than 25 years of service but more than 10 years will receive a pension on a proportionate basis.
The contours of the scheme were drawn up following discussions held under the joint consultative machinery, a platform that provides a mechanism for Central government staff to resolve differences with the government.
The union cabinet approved the new pension policy for nearly 2.3 million central government employees on August 24, 2024. The policy unveiled a framework that guarantees 50% of basic pay as a monthly pension, responding to requests from Central government staff unions who sought guaranteed retirement benefits.
The government had set up a high-level committee, headed by cabinet secretary-designate T.V. Somanathan, the then-finance secretary, in April 2023 to rework the existing pension system, known as the New Pension Scheme (NPS). This move followed widespread grievances that had escalated into a political issue, with some states, where opposition parties were in power, reverting to the old pension scheme (OPS), which had strained the government’s financial resources.
-IANS