The Unified Pension Scheme (UPS) will put an additional burden of Rs 6,250 crore per annum on the exchequer. Under this scheme, 23 lakh eligible central government employees will be given assured pension. UPS intends to increase the government contribution from the current 14 per cent to 18.5 per cent, with effect from April 1, 2025. Union Minister Ashwini Vaishnav said that due to the 4.5 per cent increase in the government contribution, the government is expected to incur additional expenditure of Rs 6,250 crore.
This amount of millions of rupees will be paid
The government will increase its contribution under UPS, but the contribution of employees will remain at 10 per cent of the basic salary. Apart from this, Rs 800 crore dues under the National Pension System (NPS) will be paid to employees who retire before March 31, 2025. If these retired employees choose the UPS option, they will get the outstanding amount.
The NPS is a contributory scheme, whereas in the earlier pension scheme, the government had promised to pay 50 per cent of the last basic salary. The NPS came into effect from January 1, 2004. Moreover, UPS plans to provide assured pension based on the period of service.
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The government has approved
The long-pending demands of government employees ahead of assembly elections in Haryana and Jammu and Kashmir have been fulfilled through the scheme approved by the Union Cabinet on August 24. Employees covered by NPS can choose the UPS option. Once an option is selected, there will be no option to change it again.
Employees who opt for UPS will be entitled to an assured pension of 50 percent of the average basic salary received in the last 12 months before retirement on completion of a minimum of 25 years of service. On the other hand, for employees with less than 25 years of service, the pension will be fixed proportionally up to the minimum service period of 10 years.
