Unified Pension System: Revolutionary Step for Viksit Bharat
Pension has always been one of the most pivotal reasons for people to chase government jobs. Pension helped retired employees and their families to sustain their living standards until younger members of the family started earning. The amount of pension received by the employees and later their spouses or dependent children has been in many cases only source of income after retirement. Thus in India, pension has always been regarded epitome of a job and financial security. This article will cover the new pension scheme approved by the government, the difference between earlier pension schemes, and the present schemes, and other important facts one should know.
On 24 August 2024, the NDA government approved another pension scheme that will be there along with the current National Pension Scheme (NPS). The withdrawal of the Old Pension Scheme (OPS) intrigued many in 2004 when the NPS was introduced and OPS ceased to exist. To bridge the gap between these two schemes for pension payments, the government has come up with an all-new pension scheme that is Unified Pension Scheme (UPS).
This pension scheme will be effective from the upcoming fiscal that FY2025-26 which is from 1 April 2025. UPS will have the features of both the pension plans that are Old Pension Scheme and New Pension Scheme to offer a wholesome retirement cushion to the employees. Narendra Modi has approved the UPS after extensive communications and discussions with the Joint Consultative Mechanism.
Unified Pension Scheme (UPS) is a new scheme that has been designed to amalgamate the benefits of both OPS and NPS under one roof. This is a pension scheme introduced this year that is 2024 that offers a family pension, a guaranteed pension amount, and a minimum pension for all the people working in central government jobs. The benefits of UPS can be availed by the state government employees too and even the ones who are covered under NPS can opt for UPS which is one of the most crucial facts about this scheme.
This pension scheme guarantees 50% of the average basic pay of the past 12 months preceding the date of retirement as the guaranteed pension for the employee, provided the employee has served the central government for at least 25 years. Under this scheme, the minimum pension will be ₹ 10000 per month for employees who have at least 10 years in the service upon superannuation. If the pensioner dies, then 60% of the pension amount, which he or she received right before the demise, will be offered to the family.
Planning your retirement and understanding the pension scheme, that suits your retirement planning the best, is crucial for financial security.
Writer: Harsh Chaturvedi, Senior Economist & Financial Expert.
