There has been a long discussion and dispute between government employees regarding pension schemes. Especially the demand for restoration of Old Pension Scheme (OPS) has gained momentum in recent years. Meanwhile, the central government has announced the Unified Pension Scheme (UPS), which will be applicable from 1 April 2025. The scheme has been prepared by mixing the benefits of OPS and National Pension System (NPS). Let’s know in detail about this new plan and its effects.
Introduction to Unified Pension Scheme (UPS)
Unified Pension Scheme (UPS) aims to provide financial security to government employees after retirement. This scheme will be applicable to employees who fall under the National Pension System (NPS) and choose UPS. Employees in UPS will get a fixed pension, which will be 50% of their last 12 months average basic salary.
UPS Scheme overview
| Speciality | Description |
| Name of the scheme | Integrated pension scheme (UPS) |
| Applied date | 1 April 2025 |
| Beneficiary | Government employees coming under NPS |
| Ability | Minimum 10 years service |
| Minimum pension | ₹ 10,000 per month |
| Government contribution | 18.5% of basic salary |
| Employee contribution | 10% of basic salary |
| Family pension | 60% of employee’s pension |
UPS vs OPS vs NPS: Main Difference
The government has designed the UPS in such a way that it incorporates the benefits of both OPS and NPS. In the table below, the major differences between these three schemes are given:
| Speciality | Ops | NPS | Above |
| Pension amount | 50% of the final salary | Market based | 50% of the last 12 months average salary |
| Employee contribution | No | 10% of basic salary | 10% of basic salary |
| Government contribution | Full funded by the government | 14% of basic salary | 18.5% of basic salary |
| Inflation relief (DR) | Yes | No | Yes |
| Minimum pension | Not specified | No | ₹ 10,000 per month |
| Family pension | Full pension | Dependent on annuity plan | 60% of employee’s pension |
Major benefits of UPS
Unified Pension Scheme provides many important benefits, which makes it attractive to government employees:
- Guaranteed Pension: Under UPS, the employee will get 50% of his last 12 months average basic salary after retirement.
- Dearness Relief: Inflation will be given on both pension and family pension.
- Minimum Pension: At least ₹ 10,000 per month is guaranteed.
- Family security: After the death of the employee, his family will get 60% of his pension.
- Lump Sam Payment: Gratuity and Lump Sam Payment will also be available at the time of retirement.
Terms and conditions related to UPS
Employees joining the UPS scheme must follow some important terms and conditions:
- This scheme will be applicable only to employees who fall under NPS.
- The employee will have to complete a minimum of 10 years of service.
- If an employee has taken a voluntary retirement and his service period is at least 25 years, then they will also get benefits under the UPS scheme.
- If an employee dismisses or resigns from service, he will not get the benefit of UPS scheme.
OPS restoration demand and reaction to UPS
Although UPS has given relief to many government employees, some employees union are still insisting on the restoration of OPS. They say that:
- There was no contribution to OPS, while in UPS, the employee would have to give part of his salary.
- The OPS was completely funded by the government while the UPS is partially based.
conclusion
Unified Pension Scheme (UPS) is a balanced effort that tries to mix the benefits of both OPS and NPS. This scheme will help provide financial security to government employees. However, some employees union are still demanding complete restoration of OPS.
Disclaimer:
This article is written only for the purpose of providing information. Unified Pension Scheme (UPS) is a real plan and has been notified by the government. Readers are requested to seek official documents or specialist advice before taking any decision related to the scheme.
