Unified Pension Scheme: Union Minister Ashwini Vaishnaw highlighted that the UPS scheme is structured around five key pillars, with the most crucial being the assured pension.
The Union Cabinet has given the green light to a significant overhaul of the pension system with the introduction of the Unified Pension Scheme (UPS). This new scheme was developed in response to widespread calls from government employees for modifications to the existing New Pension Scheme (NPS).
The NPS, introduced in the early 2000s, faced criticism for its lack of a guaranteed pension, leaving many employees concerned about their financial stability after retirement.
Also Read:- SEBI Banned Anil Ambani from Markets for 5 Years, Fined Rs 25 Crore for Unscrutinized Loans
During a Cabinet briefing, Union Minister Ashwini Vaishnaw explained, “Government employees have been advocating for changes in the New Pension Scheme. In response, Prime Minister Modi formed a committee led by Cabinet Secretary TV Somanathan. This committee engaged in over 100 meetings with various organizations and nearly all state governments.”
“After extensive consultations with all stakeholders, including the Reserve Bank of India and the World Bank, the committee recommended the Unified Pension Scheme. Today, the Union Cabinet has approved this scheme, and it will be implemented in the near future,” Vaishnaw added.
Key Pillars of the Unified Pension Scheme (UPS)
Vaishnaw highlighted that the UPS is structured around five key pillars, with the most crucial being the assured pension. This directly addresses the primary concern of government employees—ensuring a guaranteed income after retirement. The scheme also includes an assured family pension and a minimum pension, which further bolster the financial security it provides.
Features of the Unified Pension Scheme:
Assured Pension:
The UPS guarantees that retirees will receive a pension equivalent to 50% of their average basic pay during the last 12 months of service before retirement. This benefit applies to employees who have completed at least 25 years of service. For those with service between 10 and 25 years, the pension will be proportional to their length of service.
Also Read:- Local Pune Eatery Wins 13-Year Legal Battle Against Burger King Over Trademark Rights
Assured Family Pension:
In the unfortunate event of an employee’s death, their family will receive a pension amounting to 60% of the pension the employee was receiving before their passing. This provision ensures that the dependents are financially secure.
Assured Minimum Pension:
The Unified Pension Scheme also guarantees a minimum pension of ₹10,000 per month for employees who have served for at least 10 years. This is particularly important for those on lower pay scales, as it offers protection against inflation and financial instability in their retirement years.