The central government has announced a new scheme, Unified Pension Scheme (UPS) for government employees. This pension scheme will be implemented for government employees from April 1, 2025. The government will give assured pension to the employees (Govt Employees) under this scheme. This scheme will also give pension to the family after the death of the employee. Along with this, minimum assured pension will also be given under this.
How much pension will the employees and their families get?
- 23 lakh government employees will get the benefit of UPS, under which 50 percent of the employee’s average basic salary of 12 months will be given for life after retirement. However, employees will have to serve for at least 25 years. Dearness Relief (DR) will also be added to this pension from time to time.
- Talking about family pension, after the death of the employee, 60 percent of the employee’s pension will be given to any eligible member of the family.
- On the other hand, if an employee has served for 10 years or more, he will be given a minimum pension of Rs 10,000.
You will also get this benefit along with pension
Under the Unified Pension Scheme (UPS), apart from gratuity, a lump sum amount will also be given on retirement. It will be calculated as 10th of the basic salary and dearness allowance for every 6 months of service of the employees. The amount of gratuity in this may be less than that of OPS.
What was available under the Old Pension Scheme (OPS)?
The Old Pension Scheme (OPS) guarantees that on retirement of government employees at both the Central and State levels, 50% of their last basic salary is given as pension.
This also includes Dearness Allowance (DA), which compensates for rising living costs by adjusting the pension amount whenever the government increases the DA for existing employees.
A key feature of OPS is the General Provident Fund (GPF), where employees contribute a part of their income, which is later returned with interest on retirement. Additionally, employees under OPS are entitled to gratuity payments of up to Rs 20 lakh.
What is special about OPS?
Pension Amount : Under OPS, the retired employee gets a pension equal to 50% of his last salary. This gives a predictable income after retirement.
Family Pension : After the death of a retired employee, his family gets the same pension amount in the form of family pension.
Gratuity: The scheme entitles employees to gratuity of up to Rs 20 lakh, which provides additional financial support on retirement.
No Employee Contribution : In OPS, there is no need to make any investment from GPF to get pension at the time of retirement.
Dearness Allowance (DA) : DA is increased according to inflation and this DA is added to the pension, which is revised by the government every six months.
What was there in OPS that was not there in UPS
Under OPS, employees can get gratuity up to Rs 20 lakh, but the amount of gratuity can be less. However, a lump sum payment will be made as 10th part of the basic salary and dearness allowance for every 6 months of service of the employees. On the other hand, in OPS, no investment is required from GPF to get pension at the time of retirement. At present, these things are not there in UPS.