New Delhi, Jan 26 (IANS) The Union Finance Ministry has notified the operationalisation of the Unified Pension Scheme (UPS) as an option under the National Pension System (NPS) for Central government employees with effect from April 1, which will ensure them guaranteed retirement benefits.
“The Unified Pension Scheme shall be applicable to such Central Government employees who are covered under National Pension System and who choose this option under National Pension System,” the Finance Ministry’s notification states.
“Pension Fund Regulatory and Development Authority (PFRDA) may issue regulations for operationalising UPS. The effective date for operationalisation of the Unified Pension Scheme shall be 1st April 2025,” it added.
The new system, the Unified Pension Scheme or UPS, will offer 50 per cent of the average basic pay drawn by a Central government employee over the 12 months before retirement provided he or she completes 25 years of service.
Employees who have put in less than 25 years of service but more than 10 years, will get pension on a proportionate basis.
The contours of the scheme were drawn up following discussions held under the joint consultative machinery, a platform that provides a mechanism to Central government staff to resolve differences with the government.
The Union cabinet led by Prime Minister Narendra Modi on August 24, 2024, approved the new pension policy for nearly 2.3 million Central government employees, unveiling a framework that assured 50 per cent of basic pay as monthly payout, on the request of Central government staff unions who had sought guaranteed retirement benefits.
The government had set up a high-level committee headed by cabinet secretary-designate T.V. Somanathan, the then-finance secretary, in April 2023 to rework the current pension system, known as the new pension scheme or NPS. The move followed widespread grievances that had snowballed into a political hot potato, with some states, in which opposition parties were in power, switching to the previous old pension scheme (OPS) which had proved to be a strain on the financial resources of the government.
However, since it was a populist step aimed at catching votes the political parties had made it a poll issue in states such as Himachal Pradesh.
–IANS
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