The Pension Fund Regulatory & Development Authority (PFRDA) has officially notified the operationalization of the Unified Pension Scheme (UPS), which ensures an assured pension of 50% of the average basic pay drawn in the last 12 months prior to superannuation. This follows the January 24, 2025 notification by the government for central government employees covered under the National Pension System (NPS).
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According to the PFRDA statement, the regulations will come into effect from April 1, 2025. The UPS enrolment will apply to:
- Existing central government employees covered under NPS as of April 1, 2025.
- New recruits joining central government services on or after April 2025.
Eligible employees can enroll online via the Protean CRA website starting April 1, 2025, or submit their forms physically.
Key Features of the UPS
- The assured payout rate is 50% of the 12-month average basic pay before retirement, subject to a minimum qualifying service of 25 years.
- Employees dismissed, removed from service, or who resign are not eligible for UPS benefits.
- Employees have the option to choose between UPS and NPS, impacting 23 lakh central government employees.
Comparison with OPS and NPS
Under the Old Pension Scheme (OPS) (before January 2004), employees received 50% of their last drawn basic pay as pension. However, UPS is contributory, requiring employees to contribute 10% of their basic salary and dearness allowance, while the central government contributes 18.5%. The final pension payout will depend on market returns, primarily invested in government debt.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the UPS on August 24, 2024, offering a middle ground between OPS and NPS to ensure financial security for retirees.
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