UPS: The Unified Pension Scheme (UPS) launched for government employees is to be implemented from April 1, 2025. Government employees will get an opportunity to choose either National Pension System (NPS) or UPS. This scheme is especially for those government employees who are currently covered under NPS. Before deciding on this, it is important to know the special features of UPS and understand the pros and cons of both by comparing it with NPS.

Important things to note down about UPS

Unified Pension Scheme i.e. UPS is a scheme introduced to provide fixed pension to government employees. Central government employees who choose this scheme will get an amount equal to 50% of the average basic salary of the last 12 months before retirement as pension. Only those government employees will get the benefit of this scheme, who have completed at least 25 years of service. In case of death of an employee, the family will get an amount equal to 60% of his pension as family pension.

Apart from this, under UPS, such employees will also get a minimum guaranteed pension of Rs 10,000, who have completed at least 10 years of service. This scheme is also linked to inflation rate, under which the pension amount will be revised from time to time in the form of Dearness Allowance (DA). Apart from this, employees will also get a lump sum amount at the time of retirement. About 23 lakh government employees are expected to benefit from this scheme.

How can join

The option to join UPS will be available to all those Central Government employees who are currently covered under NPS. These employees can choose either UPS or NPS.

Of the government’s total contribution of 18.5% to the UPS, 8.5% will be allocated to a distinct guarantee reserve fund. Under the Old Pension Scheme (OPS), employees were not required to make any contributions. In contrast, those enrolled in the New Pension Scheme (NPS) contribute 10% of their basic salary, with the government contributing 14%. However, with the introduction of the new UPS system, the government’s contribution will rise to 18.5% of the employee’s basic salary. Additionally, employees participating in UPS will be required to contribute 10% of their basic salary along with their dearness allowance.