In a major decision impacting over two lakh state government employees, the Council of Ministers on Thursday approved the implementation of the Unified Pension Scheme (UPS), effective from August 1, 2025. The scheme will benefit employees appointed on or after January 1, 2006, and is structured under the National Pension System (NPS).
The Unified Pension Scheme is designed to offer assured minimum pension and family pension, addressing long-standing demands for more secure post-retirement financial support.
Key Benefits Under UPS:
- Assured Pension: Employees completing 25 years of service will receive 50% of the average basic pay drawn during the last 12 months prior to retirement.
- Minimum Pension Guarantee: A minimum pension of ₹10,000 per month is guaranteed for employees with at least 10 years of service.
- Family Pension: In the event of the pensioner’s death, the family will receive 60% of the last-drawn pension.
- Dearness Relief (DR): DR will be provided on pension, calculated on the same basis as Dearness Allowance (DA) for serving employees.
- Lump Sum Benefit: At the time of superannuation, employees will receive a one-time lump sum equivalent to 10% of monthly emoluments for every completed six months of service. This payout is in addition to the pension.
Contribution Structure:
- Employee contribution: 10% of salary
- Government contribution: 18.5%, of which
- 10% goes to the individual’s corpus,
- 8.5% goes to a common pool to fund the assured benefits.
Estimated Cost:
The annual financial impact of the UPS is projected to be around ₹600 crore.
Employees already enrolled under NPS and those joining in the future will have the option to either switch to UPS or continue with the existing NPS framework.
This new pension initiative aims to strike a balance between financial security for employees and sustainability for the state, bringing long-term reassurance to lakhs of government workers and their families.