The central government of India will soon be implementing the Unified Pension Scheme. The finance minister of India Mrs Nirmala Sitaraman announced on 24th January 2025 that the unified pension scheme will be implemented in India from 1st April 2025. All the citizens of India who are working as government employees will have the option of a unified pension scheme from 1st April 2025. The Government employees can now choose between a unified pension scheme or a National pension scheme according to their choice. All the Government employees who clear the eligibility criteria can just apply for the unified pension scheme online.  

What is the Unified Pension Scheme?  

The unified pension scheme (UPS) was first introduced by the central government of India back on August 24, 2024. And now finally the finance minister of India has announced that the unified pension scheme will be implemented for the government officials from 1st April 2025. To avail of the benefits under UPS the Government employees must have completed at least 25 years in service. The main difference between UPS and NPS is that Government employees can only check their contributions under NPS on the other hand under UPS they can check both contributions and benefits. 

Unified Pension Scheme Features 

Minimum service duration 

• Under the Unified Pension Scheme, Government employees have to complete at least 25 years of service to receive the benefits. 

Types of pension Unified Pension Scheme

There are a total of three types of pension available under the unified pension scheme UPS namely-

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• Self pension 

• Family pension (given to the family members of the Government employees after death)

• Minimum pension 

Formula to calculate pension under the Unified Pension Scheme

• The formula to calculate UPS Pension under the unified pension scheme is 50% of the last drawn salary over the last 12 months. 

Family pension under UPS 

• In the case of family pension under UPS, the spouse or family member of the deceased government employee will receive 60% of the pension amount. 

Assured minimum pension

• For assured minimum pension under the unified pension scheme, the central government of India has set INR 10,000 if the minimum service is 10 years.

Lump sum amount

• After retirement, the Government employees will receive a lump sum amount under UPS which is 1/10 of the last drawn salary for every six months of completed service. 

Pension contribution 

• Under a unified pension scheme, the employees will contribute a total of 10% of their salary on the other hand the employer will contribute 18.5%, making a total of 28.5%. 

Risk factor 

• Unlike NPS, the unified pension scheme has zero risk because the Government employees have all the information of how much benefit they will receive after completing their retirement. 

Inflation 

• Under the unified pension scheme, the pension amount will be updated according to the inflation index. 

How to get benefits?

• All Government employees who want to apply for the unified pension scheme or want to get more detailed information can visit the official website.

FAQ 

What is the contribution of the Government of India under the UPS Scheme? 

Ans: The Government of India has also increased its contribution from 14% to 18.5%  without affecting the employees' contribution under the UPS Scheme.

How many beneficiaries will avail of the benefits under the UPS Scheme? 

Ans: A total of 23 lakh Government employees will be selected as beneficiaries under the UPS Scheme.

What is the main objective of the unified pension scheme? 

Ans: The main objective of the unified pension scheme is to provide financial stability the Government employees after their retirement.