New Delhi: In a significant development ahead of the upcoming assembly elections in a state and a Union Territory, the government has introduced the Unified Pension Scheme (UPS).

This move comes amid ongoing protests from several states not governed by the BJP, who have expressed concerns over the New Pension Scheme (NPS).

Union Information and Broadcasting Minister Ashwini Vaishnaw announced that the UPS would benefit 23 lakh central government employees currently under the National Pension Scheme.

The new scheme, set to be implemented from April 1, 2025, will offer employees the choice between the NPS and the UPS.

Approved by the Union Cabinet, which is chaired by Prime Minister Narendra Modi, the UPS is designed to provide government employees with an assured pension, family pension, and a guaranteed minimum pension.

1. Assured Pension: The scheme guarantees that employees will receive 50 percent of their average basic salary from the last 12 months before retirement as a pension, provided they have completed at least 25 years of service. For those with a shorter service period, but at least 10 years, the pension will be proportionate.
2. Assured Family Pension: In the event of an employee’s death, their family will receive 60 percent of the last-drawn pension amount.
3. Assured Minimum Pension: The scheme ensures a minimum pension of ₹10,000 per month for employees who retire after at least 10 years of service.

Currently, under the NPS, employees contribute 10 percent of their salary, while the central government contributes 14 percent.

With the introduction of the UPS, the government’s contribution will be increased to 18 percent.

Minister Vaishnaw mentioned that some central employees met with the Prime Minister and expressed their support for the UPS during their meeting.

Last year, a committee led by Finance Secretary TV Somanathan was established to review the pension scheme for government employees and propose changes based on the existing framework of the National Pension System.

This committee was formed in response to several non-BJP-ruled states reverting to the Old Pension Scheme (OPS) and calls from employee organizations for the same.

Under the OPS, retired government employees received 50 percent of their last-drawn salary as a monthly pension, with the amount increasing in line with the Dearness Allowance (DA) rates.