New Delhi: On Saturday, the Union Cabinet, chaired by Prime Minister Narendra Modi, adopted the Unified Pension Scheme (UPS) for government employees. The system will include a guaranteed minimum income and a family pension.
Approximately 23 lakh Central Government employees would benefit from the Unified Pension Scheme. These employees can now choose between the New Pension Scheme (NPS) and the Unified Pension Scheme.
State governments will also be offered the option of using the Unified Pension Scheme. If the state governments choose UPS, approximately 90 lakh beneficiaries will be beneficiaries. The government estimates that the spending for arrears will be Rs 800 crore. The yearly cost rise will be approximately Rs 6,250 crore in the first year.
The scheme will be effective from April 1, 2025.
Central government employees will be able to choose between NPS and UPS, and existing NPS subscribers will also be able to switch to UPS.
Briefing journalists after the Cabinet meeting, Union Minister Ashwini Vaishnaw said the Centre constituted a committee on the issue that held as many as 100 meetings with several top organisations, including the RBI and the World Bank. Based on the recommendations of this committee, the Cabinet has approved the UPS.
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“Today, the Union Cabinet has approved the Unified Pension Scheme (UPS) for government employees providing for an assured pension. A 50 per cent assured pension is the first pillar of the scheme, while the second pillar will be an assured family pension,” the Minister explained.
On the spadework that went into the new scheme, the Minister said, “Government employees demanded some changes in the New Pension Scheme. For this, PM Modi constituted a committee under the chairmanship of Cabinet Secretary T.V. Somanathan. This committee held more than 100 meetings with different organisations, and nearly all the states, and the Unified Pension Scheme has been formulated based on these recommendations.”
“There’s a difference between how PM Modi works and how the opposition functions. Unlike the opposition, PM Modi believes in holding extensive consultations,” Vaishnaw added.
Highlights of Unified Pension Scheme
* Assured pension of 50 per cent of the average basic pay drawn over the last 12 months before superannuation for a minimum qualifying service of 25 years.
* Proportionate for lesser service up to a minimum of 10 years of service.
* Assured Family Pension @ 60 percent of the pension of the employee immediately before their demise.
* Assured Minimum Pension @ Rs 10,000 per month on superannuation after a minimum of 10 years of service.
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–IANS
