The Unified Pension Scheme (UPS), set to commence on April 1, 2025, offers central government employees an assured pension, addressing concerns associated with the market-linked National Pension System (NPS).
Key Features: Assured Pension Amount: Employees with at least 25 years of service will receive a pension equal to 50% of their average basic pay over the last 12 months prior to retirement. For service between 10 to 25 years, the pension is proportionally adjusted, with a minimum guarantee of ₹10,000 per month. Inflation Adjustment: Pensions will be periodically revised based on the All India Consumer Price Index for Industrial Workers (AICPI-W), ensuring alignment with inflation rates. Family Pension: In the event of a pensioner's demise, the family is entitled to 60% of the pension the employee was receiving. Eligibility Criteria: Service Tenure: Central government employees under the NPS with a minimum of 10 years of qualifying service are eligible. Full benefits are available after 25 years of service. Opt-in Requirement: Employees must choose to switch from the NPS to the UPS; the transition is not automatic. Enrollment Process: Option Submission: Eligible employees must submit their choice to opt into the UPS through their department's human resources or administrative division. Fund Transfer: Upon opting in, the accumulated corpus from the NPS will be transferred to the individual's UPS account. Confirmation: Employees will receive official confirmation of their enrollment under the UPS. Pension Calculation Example: Formula: Pension = 50% × (Average Basic Pay of Last 12 Months) Example: If the average basic pay over the last 12 months is ₹1,30,000: Pension = 0.50 × ₹1,30,000 = ₹65,000 per month Government Contributions: Employee Contribution: Employees contribute 10% of their basic pay plus dearness allowance. Government Contribution: The government matches this with a 10% contribution to the individual's pension corpus and an additional 8.5% to a pooled corpus supporting the assured payouts. Additional Considerations: Irreversible Choice: Once an employee opts for the UPS, the decision is final; reverting to the NPS is not permitted. Financial Implications: The UPS is projected to cost the government approximately ₹6,250 crores in the fiscal year 2024-25, with annual costs varying based on the number of retirees. The Unified Pension Scheme aims to provide financial stability and assured income to central government employees post-retirement, moving away from market-dependent returns to a guaranteed pension system. UPS Option Forms- Form A1 : For New Recruits in CG on or After 1st April 2025 Form A2: For existing Central Government employees who are covered or are entitled to National Pension System Form B1: For the eligible Central Government employees who have superannuated or retired on or before 31st March 2025, and were covered under National Pension System. Form B2: In case of deceased Central Government employee who was covered under NPS and was eligible to avail benefits under UPS. The Unified Pension Scheme (UPS), effective from April 1, 2025, introduces specific forms to facilitate the transition and enrollment of various categories of central government employees and their beneficiaries. Below is an overview of each form and its intended purpose:
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