The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Unified Pension Scheme (UPS), a significant move aimed at enhancing the retirement benefits for government employees. The UPS introduces a range of features designed to provide financial security to retirees and their families.
One of the key highlights of the scheme is the assured pension, which guarantees 50% of the average basic pay drawn over the last 12 months before superannuation for employees with a minimum qualifying service of 25 years. For those with a shorter service period, the pension will be proportionate, provided they have served for at least 10 years. This measure ensures a steady income stream for retirees, helping them maintain their standard of living post-retirement.
In addition to the pension, the scheme also offers an assured family pension at 60% of the employee's pension immediately before their demise. This provision aims to support the families of deceased employees, ensuring they receive a substantial portion of the income the employee would have drawn.
Furthermore, the UPS introduces an assured minimum pension of ₹10,000 per month for employees who have completed at least 10 years of service. This minimum threshold guarantees that even those who may not have reached higher salary brackets during their service will still receive a dignified pension.
The scheme also addresses inflation through inflation indexation on assured pension, assured family pension, and assured minimum pension. This indexation, along with Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), will help protect pensioners from the eroding effects of inflation.
Additionally, at the time of superannuation, employees will receive a lump sum payment equivalent to one-tenth of their monthly emoluments (pay plus DA) for every completed six months of service. Importantly, this payment will not reduce the quantum of the assured pension, offering retirees an extra financial cushion as they transition into retirement.
