New Delhi, March 24
From April 1, Central government employees with at least 25 years of service will be eligible for a fixed pension equal to 50 per cent of their average basic salary from the last 12 months before retirement under the new Unified Pension Scheme (UPS).
The government is introducing the UPS to offer more financial security after retirement to at least 23 lakh Central government employees, particularly for those who prefer a stable and predictable income instead of a market-linked pension.
Employees, who have served for more than 10 years but less than 25 years, will receive a minimum pension of Rs 10,000 per month. In case of the pensioner’s death, their family will be entitled to 60 per cent of the last pension drawn as a family pension.
Central government employees, currently under the National Pension System (NPS), will have the option to switch to the UPS.
The scheme is designed as a hybrid model, incorporating features from both the Old Pension Scheme (OPS) and the NPS.
Unlike the NPS, which offers market-based returns without any fixed payout, the UPS ensures a guaranteed pension amount.
The OPS, which was replaced by the NPS in 2004, provided fully government-backed pensions with periodic dearness allowance revisions.