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Unified pension scheme for central government employees announced

India’s Finance Ministry, on January 25, officially notified the Unified Pension Scheme for central government employees, which will be effective from April 1, 2025. The scheme would be for those employees who are covered under the National Pension System and have opted for this retirement benefit.

The Finance Ministry said regulations for operationalising the UPS shall be issued by the Pension Fund Regulatory and Development Authority (PFRDA). The scheme assures a pension equivalent to 50% of average basic pay earned during the last 12 months preceding retirement, for having rendered a minimum of 25 years service. For those with between 10 and 25 years of service, pensions will be calculated on a proportionate basis.

The UPS framework was formulated after a series of consultations through the joint consultative machinery, which is a forum for central government employees to raise issues before the government. In August last year, the Union Cabinet cleared a new pension policy with the aim of securing assured retirement benefits for about 2.3 million central government employees.

Against this, the UPS is contributory. Under this, the staff shall contribute 10% of the basic salary and DA whereas the contribution of the government would be 18.5% of the Basic Pay plus Dearness Allowance. The employees drawing the pre-January 2004 retirements under the earlier OPS got a pension of 50 per cent of their last drawn basic pay and no personal fund was required other than the general provident fund,.

The change to the NPS had earlier seen some States not ruled by the BJP revert to the OPS with its apparently more-attractive benefits, and the Centre had subsequently set up a committee in April 2023. Headed by former Finance Secretary TV Somanathan, the committee was to recommend changes in the framework of the NPS.

Source
Wion News

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