Unified Pension Scheme to Launch on April 1, 2025: Key Benefits and Implementation Details

New Delhi: The Central Government has introduced the Unified Pension Scheme (UPS), set to take effect on April 1, 2025. This new pension framework aims to provide financial security and stability for government employees post-retirement.

Maharashtra Becomes the First State to Adopt UPS

Maharashtra has become the first state to implement the Unified Pension Scheme, with the state cabinet approving its adoption for government employees on August 25, 2024. The scheme is expected to benefit 23 lakh Central Government employees, ensuring long-term financial stability.

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Who Is Eligible for UPS?

• Government employees currently under the National Pension System (NPS) can opt for UPS.
• Employees must have a minimum of 10 years of service to qualify for pension benefits.
• Employees with 25+ years of service will receive 50% of their last 12 months’ average basic pay as pension.
• Employees with 10–25 years of service will receive a pro-rata pension.
• In case of an employee’s demise, their family will receive 60% of the pension as a family pension.

Minimum Pension and Contribution Structure

Under UPS, employees completing at least 10 years of service will receive a guaranteed pension of ₹10,000 per month upon retirement.

• Employee Contribution: 10% of Basic Pay + Dearness Allowance (DA).
• Government Contribution: Increased from 14% to 18.5%, including an additional 8.5% pooled fund contribution.

Additional Benefits for Retirees

• The pension amount will be indexed to inflation, ensuring protection against rising costs.
• Employees will receive dearness relief and a lump sum gratuity, calculated as 1/10th of monthly emoluments (pay + DA) for every six months of service.
• In case of an employee’s death, the family pension will be 60% of the pension amount.

UPS Availability and Future Expansion

Currently, the Unified Pension Scheme is available only for Central Government employees. While there is a possibility of extending it to State Government employees, private-sector employees are not eligible to open a UPS pension account under the present provisions.

With its structured long-term pension benefits, the Unified Pension Scheme aims to provide financial dignity and security to government employees post-retirement.