Unified Pension Scheme: An important pension scheme launched by the Central Government for Central employees. Recently, the government of India got the Unified Pension Scheme (UPS) approved by the Union Cabinet and is replacing NPS. This new pension scheme, also known as UPS Unified Pension Scheme, is expected to benefit about 23 lakh government employees under this scheme. UPS Pension Scheme will be implemented from April 1, 2025. Read the full post for more information.
What is the UPS Unified Pension Scheme 2025
There is a new pension scheme launched by the Government of India for central government employees, whose full name is Unified Pension Scheme, we also know it as UPS Pension Scheme and New Pension Scheme. The 21-year-old National Pension System (NPS) will soon be phased out and is set to be replaced by the Unified Pension Scheme.
The UPS Pension Scheme was approved by the Indian Cabinet on August 24, 2024 and will come into effect from April 1, 2025. UPS Unified Pension Scheme 2024 is an updated version of the pension scheme, this version addresses the emerging needs of government employees and ensures that they get adequate social security during their retirement years.
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Overview of the Unified Pension Scheme
| Scheme Name | Unified Pension Scheme (UPS) |
| Launched By | Central Government |
| Objective | Provide Pension Facility |
| Beneficiary | 23 lakh central government employees |
| Eligible | Government employees |
| Start from | April 1, 2025 |
| Years | 2024 |
| UPS Pension Scheme Different from | National Pension Scheme, and Old Pension Scheme |
| Official Website | https://www.epfindia.gov.in/ |
Difference Between Unified Pension Scheme, National Pension Scheme, and Old Pension Scheme:
UPS, NPS, and OPS
| OPS | NPS | UPS | |
|---|---|---|---|
| Pension | 50% + DA | The pension amount is not fixed since it is paid based on the return on investments made in market-linked instruments managed by professional fund managers. | 50% + DA |
| Contribution of Employee for Pension | No | Yes (10% of Basic + DA) | Yes (10% of Basic + DA) |
| Gratuity | Yes | Yes | Yes |
| Withdrawal of Commuted Corpus | Whole amount of GPF | Employees can withdraw 60% of the corpus upon retirement, which is tax-free and 40% invested in annuities for getting a pension. | Not mentioned |
| GPF | Yes | No | No |
| Inflation Indexation | Pension increases with the revision of DA twice a year. | No | Pension increases with the revision of DA twice a year. |
| Contributed Money | Can withdraw once in year | No | No |
| Lump Sum Payment | No | No | 1/10th of monthly emoluments (basic + DA) as on the date of superannuation for every completed 6 months service. |
| VRS | Eligible for pension on the Date of VRS | Employee will get only 20% of Commuted Corpus and rest 80% will be invested in annuities for getting a pension. | May eligible for pension only after as on date of actual retirement |
| Minimum Pension | 9000/- + DA (minimum 20 years) | No | 10000 /- + DA after superannuation minimum 10 years of service (it is not mentioned about the minimum pension in case of Death before 10 months |
| Family pension in case of Death during service | 60 % of Basic or 30% of family pension | OPS to family till date of 60 years’ service of deceased employee i.e. 50 % of basic After this, 30% of family pension | 30% of family pension |
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Eligibility Criteria
There are specific eligibility criteria for Unified Pension Scheme. Below, we have told you the eligibility criteria for this scheme:
- The candidate should be a resident of India and only government employees will get the benefit of this scheme
- To get pension under UPS, the employee has to serve for at least 10 years to be eligible for it.
- To avail full pension benefits under UPS, the employee has to serve for at least 25 years and only then he will be able to avail the full benefit.
- The UPS scheme is optional for existing employees under the National Pension System (NPS) and those taking voluntary retirement under NPS.
How to calculate UPS Pension?
As per the UPS calculator for pension scheme, the pension is 50% of the average basic salary received in the last 12 months. The Integrated Pension Scheme formula for contribution is as follows:
- Employees Contribution: 10% of basic salary and DA.
- Government Contribution: 18.5% of the employee’s salary.
UPS Unified Pension Scheme FAQs
What is the UPS Pension Plan?
UPS Unified Pension Scheme is a new pension scheme that provides government employees a pension of 50% of their last 12 months’ income along with certain other benefits.
What is difference between OPS and UPS?
OPS provides a fixed pension based on the last salary received without requiring a contribution from the employees, while UPS requires a 10% contribution from the employees.
NPS or UPS, which is better?
UPS is generally considered better for those who want a guaranteed pension amount, while NPS is more suitable for individuals who are willing to invest in a market-linked system.
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