Unified Pension Scheme: The recently announced Unified Pension Scheme (UPS) for Central Government employees will be available only to those who are currently subscribers of the New Pension Scheme (NPS) and these include retired employees as well.
Unified Pension Scheme (UPS): Under the recently announced Unified Pension Scheme (UPS) for Central Government employees, an important announcement has also been made for pension to the family. The question is on what basis the pension will be given to the family after the death of the employee. Let us understand this.
Calculation of pension
Under the Unified Pension Scheme, 60 percent of the employee’s pension will be given just before his death. Suppose the employee’s pension was Rs 30,000. 60% of Rs 30,000 pension is Rs 18,000. Inflation relief is also included in this.
Let us tell you that the recently announced Unified Pension Scheme (UPS) for Central Government employees will be available only to those who are currently subscribers of the New Pension Scheme (NPS) and these include retired employees as well.
Details of UPS scheme
Under the UPS scheme, employees are guaranteed 50 percent of their average basic salary as pension in the last 12 months before retirement on completion of minimum qualifying service of 25 years. Whereas the amount received in NPS depends on the returns from the market. This scheme also ensures a pension of Rs 10,000 per month on retirement after a minimum of 10 years of service. This scheme has been brought to address the concerns of government employees related to NPS.
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UPS Contribution
Unlike the old pension scheme, UPS is a scheme of contributory nature in which employees will have to contribute 10 percent of their basic salary and dearness allowance. At the same time, the contribution of the employer (Central Government) will be 18.5 percent. Under NPS, the employer’s contribution has been kept at 14 percent while the employee’s contribution is fixed at 10 percent.
Under OPS, which was in force till December 2003, government employees were not required to make any contribution. However, they used to contribute to the General Provident Fund (GPF). The deposited amount along with interest was given at the time of retirement of the employee.
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