Govt Plans To Notify UPS Rules By Oct 15: Know Features And Beneficiaries

The government is expected to notify the Unified Pension Scheme (UPS) rules by October 15, 2024, and the scheme will be implemented from April 1, 2025. According to The Economic Times, Cabinet Secretary TV Somanathan is coordinating with various departments for its implementation. The Department of Personnel & Training will assess the choice of employees, and the Department of Administration Reforms and Personnel Grievances will prepare the scheme’s rule book. Similarly, the Pension Fund Regulatory and Development Authority (PFRDA) will look after the investment part of the scheme. At the same time, the report said the Department for Pension and Pensioners’ Welfare and the National Security Depository Ltd (NSDL) are involved in developing and checking the scheme’s operational requirements.

UPS Beneficiaries

The centre has announced UPS for central government employees, which will benefit some 2.3 million employees. The latest pension scheme is not mandatory but an option for central government employees. At present, the employees have to mandatorily contribute to the National Pension System (NPS), to which the government (employer) also contributes, and the fund is invested in the market with a mixed bag of equity and debt and managed by the pension fund managers.

However, there have been a lot of protests by employee organizations demanding to bring back the old pension scheme, which guarantees a certain pension amount and is not market-linked. In response to that, the government has brought UPS.

Also Read: PFRDA Launches Balanced Lifecycle Fund For NPS Private Sector Subscribers

What Is UPS?

The UPS is a combination of the OPS and NPS features. UPS is a contributory scheme like NPS and a guaranteed pension scheme like OPS. S, here the employee will contribute 10 per cent of salary to the pension scheme during work life. The employer will contribute 18.5 per cent.

After retirement, employees will receive a guaranteed pension, gratuity, and a lump-sum amount. The pension will be 50 per cent of an employee’s last 12 months’ average salary if the employee has worked for 25 years or more. The pension will be proportionate for those whose service period has been within 10 to 25 years.

However, UPS guarantees everybody a minimum pension of Rs 10,000. The lump sum will be 1/10th of the salary for every six months of service.

There will also be a guaranteed family pension, 60 per cent of the employee’s pension while alive.

As per the government’s estimates, if the states adopt this scheme, the number of beneficiaries could reach 9 million.