Article Title: The central government is bringing UPS (Unified Pension Scheme) instead of NPS (National Pension System) for employees.
14-03-2025
Economy Prelims Plus
Context
UPS is a fund-based payout system that ensures government employees receive anassured payoutafter retirement.
It relies on the regular and timely accumulation of contributions from both the employee and the Central Government, which are invested to provide a monthly payout to the retiree
To be implemented from-April 1, 2025.
Eligibility -It is available to thosecentral government employeeswho are already enrolled in the NPS and have opted for this new scheme.
Features
Guaranteed pension -Pensioners will receive 50% of their average basic pay (from the last 12 months before retirement) as a pension, provided they have completed at least 25 years of service.
Those with a shorter service period (minimum 10 years) will receive a proportionate pension with a minimum pension guarantee of at least 10,000 Rs
Family pension -In case of the employee’s death, the surviving spouse will receive 60% of the pension amount that the employee was receiving before death.
Inflation protection -The pension amount will be adjusted for inflation, just like Dearness Relief (DR) for serving employees, based on the All India Consumer Price Index for Industrial Workers (AICPIN-IW).
The state governmentscan also adoptand implement the UPS scheme for state government employees.Maharashtrais the first state to implement UPS.
National Pension System will also remain available for those who do not want to switch to the UPS.
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