The Unified pension scheme was launched by the Central government for government servants to provide financial benefits and security after their retirement. The Unified Pension scheme was launched on 24th January 2025 with the notification provided by the financial ministry. However, the Unified Pension scheme came as an option under the National government system for government servants; also this scheme will come into force from 11th of April 2025. In this article, we will be sharing all the necessary details related to the Unified pension scheme, its eligibility, ups pension scheme retirement benefits, etc.
What is a Unified Pension Scheme?
The Unified Pension Scheme is a new initiative taken by the central government for retired officers to ensure the financial stability and security of government employees. The main aim behind this scheme was to secure the dignified future of the servants. The Unified pension scheme comes under the National Pension scheme. The beneficiaries are provided with an option to switch to the UPS. However, if one decides to switch to UPS then they cannot reverse their decision. The state government is continuously trying to implement this scheme for their employees. Maharashtra became the first ever state to implement this scheme on 25th August 2024 with the approval of the cabinet. Moreover, the UPS came into existence to provide the benefits to 90 lakhs Indian government employees while simplifying and combining various pension plans into one.
| Name of the scheme | Unified pension scheme |
| Announcement date | 24th August 2024 |
| Came into force | 24th January 2025 |
| Date of Implementation | 1st April 2025 |
| Benefits | It provides a pension of 50% of their average pay over the last 12 months before retirement Rs 10,000 per month upon superannuation after 10 years of service |
| Employee contribution | 10% salary and dearness allowance |
| Employer contribution | 18.5% salary and dearness allowance |
Eligibility Criteria for the UPS Scheme
The applicants applying for the Unified Pension Scheme need to follow the below given eligibility criteria:
- The government employees who have completed their 10 years of working in Government institutions are eligible for a fixed pension amount offered in UPS.
- The government servants who have completed their 25 years of working are also able to get the fixed percentage of their average pay.
- The government employees who are enrolled under the National Pension Scheme and opt for the voluntary retirement scheme or NPS are eligible for this scheme.
Benefits of a Unified Pension Scheme
This government scheme provides various benefits to government servants. Some of the benefits are listed below:
1. Government contribution
According to ups pension scheme retirement, the government will allow 18.5% of the employee’s basic salary to their pension funds as a contribution for the beneficiary.
2. Assured pension
The Government provides 50% average basic pay to the retired servants over 12 months before retirement. However, this benefit is provided to those who have 25 years of service.
3. Assured family pension
The Central government provides an average amount of 10,000 to those who have completed their 10 years of service.
4. Inflation indexation-
The government also provides the inflation indexation that will provide an assured pension as well as assured family pension to the beneficiary. This scheme will be provided to the industrial workers which is based on the All India Consumer Price Index for industrial works.
5. Lump sum payment-
The employees receive a lump sum amount of money after retirement which is equal to one tenth to their monthly emoluments.
Unified Pension Scheme Returns
The ups pension scheme retirement offers a lump sum amount to the servants after their retirement to provide them better financial support. According to this scheme, the Government will help by contributing around 18.5% of their basic salary with dearness allowances and the employees will contribute around 10% of their salary allowances with dearness amount. However, the government employee who has completed their 25 years of service will be rewarded with 50% of their average basic pay before the 12 months of their retirement and those who only completed their 10 years of service will be given 10,000 per month after retirement.
Unified Pension Scheme v/s National Pension Scheme
| Particulars | Unified Pension scheme | National Pension scheme |
| Pension amount | The employees who have completed their 25 years of working will be provided with an average 50% of the basic pay 12 months before their retirement. | The National Pension scheme doesn’t promise any type of fixed pension amount. The money will be provided depending on the investments and returns and the total accumulated corpuses. |
| Minimum pension amount | The Government will provide 10,000 Indian rupees per month to those servants who are retiring after completing their 10 years of services. | The minimum pension amount will depend on the investment made by the employer in a market-linked investment scheme. |
| Inflation protection | The Unified Pension scheme provides inflation protection with a pension which is based on the AICPI-IW. | In the National Pension scheme, there is no option for any type of inflation protection. |
| Family pension | In any case of the retired beneficiary’s death, the 60% pension amount will be provided to their family after the retiree’s demise. | Under the National Pension scheme, the family pension depends on their annual annuity plan. |
| Lump sum amount | Under the unified pension scheme, the lump sum amount will be calculated by the 1/10th of their last monthly pay for every six months till retirement. | The employees will get the 60% amount upon superannuation. |
The Unified Pension scheme consists of the features of both the Old Pension scheme as well as the National Pension scheme. The major aim of the Unified Pension scheme was to provide the benefits of assured pension and family pension to the retired government servants.
| 1. | Ladli Laxmi Yojana |
| 2. | Ladli Behna Yojana |
| 3. | Mahtari Vandana Yojana Update |
| 4. | Annapurna Yojana |
| 5. | Mukhyamantri Jal Bachao Abhiyan |
FAQs
1. When did the Unified Pension scheme come into force?
The Unified Pension scheme will came into force on 1st April 2025.
2. Which one is better: the Unified Pension scheme or the National Pension scheme?
Under the Unified Pension scheme, the retired employee gets the guaranteed amount of pension while under the National Pension scheme, the employees will only get the amount they have invested.
3. Is a unified pension scheme available for the private sector?
No, the Unified Pension scheme was only available for government employees.
4. What are the features of the Unified Pension scheme?
The basic features of Unified Pension schemes are:
- It provides a 50% amount to the employees who completed their 25 years of working before the 12 months of their retirement.
- 60% of the money will be given to the family of the employees of he or she will if they are declared dead
- Assured pension amount of INR e10,000 will be given to the employees if they retire after 10 years of service.
5. Does the Unified Pension scheme offer a lump sum amount?
Yes, the Unified Pension scheme provides a lump sum amount of the payment to the retired officer.
