Unified Pension Scheme 2025: An Overview

In a significant move aimed at enhancing the retirement benefits for its employees, the Central Government has introduced the Unified Pension Scheme (UPS). This new pension scheme, which falls under the National Pension System (NPS), was officially notified on January 25, 2025. The scheme is set to come into effect from April 1, 2025. Its primary goal is to provide assured payouts, structured retirement benefits, and greater flexibility for government employees. This initiative reflects the government’s commitment to ensuring financial security for its employees post-retirement.

Eligibility for the Unified Pension Scheme

The Unified Pension Scheme will be available to central government employees who are part of the NPS and opt for the UPS. To qualify for the assured payouts, employees must meet certain conditions. For instance, they need to have served a minimum of 10 years, and they must retire without facing any punishment under the relevant rules. Additionally, those opting for voluntary retirement after 25 years of service will also be eligible. However, it is important to note that employees who are removed, dismissed, or resigning from their positions will not qualify for this scheme.

Main Benefits of the Unified Pension Scheme

One of the key features of the UPS is its structured retirement benefits. Employees who have served for 25 years or more can expect to receive a pension amounting to 50% of their average basic pay from the last 12 months of service. For those with less than 25 years of service, the pension amount will be calculated based on a specific ratio. Furthermore, employees with a minimum of 10 years of service will receive an assured payout of at least ₹10,000 every month, ensuring a safety net as they transition into retirement.

Family Support and Inflation Relief

The Unified Pension Scheme also includes provisions for family benefits, which is a crucial aspect for many employees. In the event of an employee’s death after retirement, the spouse will receive 60% of the assured payout as a family pension. To combat inflation, the scheme will provide dearness relief on both the assured payouts and family pensions, similar to the dearness allowance (DA) given to serving employees. Additionally, upon retirement, employees will receive a lump sum payment of 10% of their basic pay along with the dearness allowance, further contributing to their financial stability during retirement.