In a major overhaul to the pension system of India, the Union government announced a new Unified Pension Scheme (UPS) that assures&nbsp;pension to central government employees, along with other benefits, post-retirement.

The decision was taken in the wake of the central government employees' long-pending demand to bring reforms in the National Pension Scheme (NPS). The government will implement the UPS on April 1, 2025.

In this week's Money-Wise, we try to analyse the newly rolled out Unified Pension Scheme and how it is different from the previous pension schemes.

<h2>UPS: A mixed basket of all goodness of NPS and OPS?</h2>

The newly-introduced Unified Pension Scheme stands a little ahead of the National Pension Scheme (NPS) as it ensures fixed pension&nbsp;to retirees, which was a major drawback of the NPS.&nbsp;

The assured pension will be 50 per cent of the average basic salary drawn by a government&nbsp;employee in the last 12 months after serving for a minimum of 25 years.

Also Read:&nbsp;<a href="https://www.wionews.com/india-news/india-unveils-new-pension-scheme-for-govt-employees-here-are-its-key-features-753011">India unveils new pension scheme for government employees; here are its key features</a>

Apart from the assured pension, the UPS offers inflation&nbsp;indexation, an assured minimum pension of Rs 10,000 per month and a family pension, which were missing in the NPS. The family pension, which was part of the OPS (Old Pension Scheme), will be 60 per cent of the pension last received by the retiree.

The UPS also has the feature of lumpsum payment at superannuation, along with gratuity, which will be calculated as 1/10th of the monthly emolument plus dearness allowance for every six months served in the government.

A key feature borrowed from the NPS is that of a contributory and fully funded scheme, which means that the members can contribute towards their pension fund and ensure a high pension payout upon retirement.

<h2>Here's how UPS differs from NPS and OPS in key features</h2>

<h2><img alt="pension scheme plans" data-entity-type="file" data-entity-uuid="c37e8031-7fbb-4bc4-8c9a-5edaad878de0" src="//cdn.wionews.com/sites/default/files/inline-images/ups%20vs%20nps%20vs%20ops%20%281%29.png" /></h2>

<h2>Who all are eligible for UPS?</h2>

Unde UPS, government employees will be eligible for a fixed pension amount after completing at least 10 years of service and will receive a pension of 50% of the average basic pay after completing 25 years.&nbsp;

All those employees who have retired under the NPS from 2004 onwards are also eligible and can avail UPS. All those who are currently under NPS and have opted for Voluntary Retirement Scheme (VRS) under NPS will also have the choice of joining the UPS if they are government employees, which will then remain unchanged.

Watch:&nbsp;Family-owned businesses dominate Indian GDP

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/family-owned-businesses-dominate-indian-gdp-747575/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

However, the government employees are still free to remain under the NPS.

<h2>UPS vs NPS: Which is a better investment for employees?</h2>

Those who subscribe to the UPS will get a guaranteed pension amount, however, the pension amount under NPS fluctuates because the investment is made in the market-linked security schemes.&nbsp;

Although UPS gives an assured pension, NPS can at times provide a higher pension amount when there are higher returns in the market-linked investments, though the situation can be the exact opposite if the market is down.&nbsp;

UPS is more suitable for employees who want a guaranteed pension amount without any risk and NPS is for those who aim for higher returns and are willing to take risks by making market-based investments.

In a major overhaul to the pension system of India, the Union government announced a new Unified Pension Scheme (UPS) that assures pension to central government employees, along with other benefits, post-retirement.

In a major overhaul to the pension system of India, the Union government announced a new Unified Pension Scheme (UPS) that assures pension to central government employees, along with other benefits, post-retirement. The decision was taken in the wake of the central government employees' long-pending demand to bring reforms in the National Pension Scheme (NPS). The government will implement the UPS on April 1, 2025. In this week's Money-Wise, we try to analyse the newly rolled out Unified Pension Scheme and how it is different from the previous pension schemes. UPS: A mixed basket of all goodness of NPS and OPS? The newly-introduced Unified Pension Scheme stands a little ahead of the National Pension Scheme (NPS) as it ensures fixed pension to retirees, which was a major drawback of the NPS. The assured pension will be 50 per cent of the average basic salary drawn by a government employee in the last 12 months after serving for a minimum of 25 years. Also Read: India unveils new pension scheme for government employees; here are its key features Apart from the assured pension, the UPS offers inflation indexation, an assured minimum pension of Rs 10,000 per month and a family pension, which were missing in the NPS. The family pension, which was part of the OPS (Old Pension Scheme), will be 60 per cent of the pension last received by the retiree. The UPS also has the feature of lumpsum payment at superannuation, along with gratuity, which will be calculated as 1/10th of the monthly emolument plus dearness allowance for every six months served in the government. A key feature borrowed from the NPS is that of a contributory and fully funded scheme, which means that the members can contribute towards their pension fund and ensure a high pension payout upon retirement. Here's how UPS differs from NPS and OPS in key features Who all are eligible for UPS? Unde UPS, government employees will be eligible for a fixed pension amount after completing at least 10 years of service and will receive a pension of 50% of the average basic pay after completing 25 years. All those employees who have retired under the NPS from 2004 onwards are also eligible and can avail UPS. All those who are currently under NPS and have opted for Voluntary Retirement Scheme (VRS) under NPS will also have the choice of joining the UPS if they are government employees, which will then remain unchanged. Watch: Family-owned businesses dominate Indian GDP However, the government employees are still free to remain under the NPS. UPS vs NPS: Which is a better investment for employees? Those who subscribe to the UPS will get a guaranteed pension amount, however, the pension amount under NPS fluctuates because the investment is made in the market-linked security schemes. Although UPS gives an assured pension, NPS can at times provide a higher pension amount when there are higher returns in the market-linked investments, though the situation can be the exact opposite if the market is down. UPS is more suitable for employees who want a guaranteed pension amount without any risk and NPS is for those who aim for higher returns and are willing to take risks by making market-based investments.

Money-Wise: India introduces Unified Pension Scheme. Will it be more beneficial than NPS & OPS?

In a major decision that will ensure 50 per cent of the salary as pension for 23 lakh central government employees, the Union Cabinet, headed by PM Narendra Modi, approved the Unified Pension Scheme (UPS) on Saturday.

This scheme shall come into force from April 1, 2025. Central government employees will have to opt either for the National Pension Scheme or the Unified Pension Scheme. Further, existing subscribers of the National Pension Scheme under the central government would also be provided an option to switch over to the Unified Pension Scheme. State governments would also have the option to adopt the Unified Pension Scheme.

Everything you need to know:

Assured Pension: 50 per cent of the average basic pay drawn during the last 12 months prior to superannuation, in case the individual has rendered qualifying service of 25 years or more.

Proportionate for lesser service up to a minimum of 10 years of service

Ensured Family Pension @60 per cent of the pension of the employee immediately before her/his demise.

Assured Minimum Pension @10000 per month on superannuation after a minimum of 10 years of service.

Inflation Indexation: On assured pension, on assured family pension, and assured minimum pension, dearness relief based upon All India Consumer Price Index for Industrial Workers (AICPIW) as in the case of serving employees

Lump sum payment on superannuation, besides gratuity.

1/10th of emoluments for each completed six-month period of service reckoned from the date of superannuation. The payment shall not reduce the quantum of pension guaranteed.

Union Minister Ashwini Vaishnaw announced the details of the scheme and added that a committee constituted by the Centre held 100 meetings with several top organisations, including RBI and World Bank, to take a call on the scheme that will benefit 23 lakh central government employees. He said that the government employees will have a choice to make between the New Pension Scheme and UPS.

"PM Modi constituted a committee under the chairmanship of Cabinet Secretary TV Somanathan. This committee held more than 100 meetings with different organisations and nearly all the states. There's a difference between how PM Modi works and the opposition works," Vaishnaw said.

"Unlike the opposition, PM Modi believes in holding extensive consultations. Following extension consultations with everyone, including the Reserve Bank of India and the World Bank, the committee has recommended a Unified Pension Scheme. Today, the Union Cabinet has approved this Unified Pension Scheme, and it will be implemented in the future," he added.

"Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension...50 per cent assured pension is the first pillar of the scheme...second pillar will be assured family pension...About 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS)...There will be an option for the employees to opt between NPS and UPS," Vaishnaw said.

In a major decision that will ensure 50 per cent of the salary as pension for 23 lakh central government employees, the Union Cabinet, headed by PM Narendra Modi, approved the Unified Pension Scheme (UPS) on Saturday.

In a major decision that will ensure 50 per cent of the salary as pension for 23 lakh central government employees, the Union Cabinet, headed by PM Narendra Modi, approved the Unified Pension Scheme (UPS) on Saturday. This scheme shall come into force from April 1, 2025. Central government employees will have to opt either for the National Pension Scheme or the Unified Pension Scheme. Further, existing subscribers of the National Pension Scheme under the central government would also be provided an option to switch over to the Unified Pension Scheme. State governments would also have the option to adopt the Unified Pension Scheme. Everything you need to know: Assured Pension: 50 per cent of the average basic pay drawn during the last 12 months prior to superannuation, in case the individual has rendered qualifying service of 25 years or more. Proportionate for lesser service up to a minimum of 10 years of service Ensured Family Pension @60 per cent of the pension of the employee immediately before her/his demise. Assured Minimum Pension @10000 per month on superannuation after a minimum of 10 years of service. Inflation Indexation: On assured pension, on assured family pension, and assured minimum pension, dearness relief based upon All India Consumer Price Index for Industrial Workers (AICPIW) as in the case of serving employees Lump sum payment on superannuation, besides gratuity. 1/10th of emoluments for each completed six-month period of service reckoned from the date of superannuation. The payment shall not reduce the quantum of pension guaranteed. Union Minister Ashwini Vaishnaw announced the details of the scheme and added that a committee constituted by the Centre held 100 meetings with several top organisations, including RBI and World Bank, to take a call on the scheme that will benefit 23 lakh central government employees. He said that the government employees will have a choice to make between the New Pension Scheme and UPS. "PM Modi constituted a committee under the chairmanship of Cabinet Secretary TV Somanathan. This committee held more than 100 meetings with different organisations and nearly all the states. There's a difference between how PM Modi works and the opposition works," Vaishnaw said. "Unlike the opposition, PM Modi believes in holding extensive consultations. Following extension consultations with everyone, including the Reserve Bank of India and the World Bank, the committee has recommended a Unified Pension Scheme. Today, the Union Cabinet has approved this Unified Pension Scheme, and it will be implemented in the future," he added. "Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension...50 per cent assured pension is the first pillar of the scheme...second pillar will be assured family pension...About 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS)...There will be an option for the employees to opt between NPS and UPS," Vaishnaw said.

India greenlights Unified Pension Scheme, promising 50 per cent assured pension

The Union Cabinet led by Prime Minister Narendra Modi announced a Unified Pension Scheme (UPS) on Saturday (Aug 24), which aims to increase the retirement benefits for 23 lakh central government employees.

The UPS has certain elements of both the Old Pension Scheme (OPS) and the current National Pension Scheme (NPS) that will benefit the employees. The scheme will be effective from April 1, 2025, and will include assured pensions, family pensions, and minimum pensions to provide financial security for government workers after retirement.

Central government employees will be given the option to choose between UPS and NPS. Employees who are already NPS subscribers will be given an option to switch to UPS.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/india-bjp-urges-top-poll-body-to-change-haryana-election-dates-congress-slams-753039">India: BJP urges top poll body to change Haryana election dates, Congress reacts</a>

<h2>Key features of the Unified Pension Scheme</h2>

Assured pension

Employees who subscribe to the UPS with at least 25 years of service will get an assured pension of 50% of their average basic pay over the last 12 months before retirement. Other employees having a minimum of 10 years of service will be eligible for a pension proportionate to their tenure.

Assured family pension

UPS provides an assured family pension after their demise, according to which the employee's spouse will be given 60% of the pension drawn before their death.

Assured minimum pension

Employees who retire before completing 25 years of their service will be assured a minimum pension of&nbsp; Rs 10,000 monthly after retirement with a minimum of 10 years of service.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/amit-shah-chairs-crucial-meeting-to-strengthen-anti-naxal-strategy-officials-of-7-states-attend-753013">Home Minister Amit Shah chairs crucial meeting to strengthen anti-Naxal strategy; officials of 7 states attend</a>

Inflation indexation

For the subscribers of UPS, the assured pension, family pension and minimum pension will be indexed to inflation.

Dearness Relief

Both serving and retired employees under the UPS will get Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW).&nbsp;

Lump sum payment on superannuation

Apart from the assured pension, subscribers of UPS will also receive a lump sum payment on superannuation along with gratuity. This payment will amount to 1/10th of the employee's monthly emoluments, which includes pay and Dearness Allowance, as of the date of retirement for every completed six months of service.&nbsp;

(With inputs from agencies)

The Union Cabinet led by Prime Minister Narendra Modi announced a Unified Pension Scheme (UPS) on Saturday (Aug 24), which aims to increase the retirement benefits for 23 lakh central government employees.

The Union Cabinet led by Prime Minister Narendra Modi announced a Unified Pension Scheme (UPS) on Saturday (Aug 24), which aims to increase the retirement benefits for 23 lakh central government employees. The UPS has certain elements of both the Old Pension Scheme (OPS) and the current National Pension Scheme (NPS) that will benefit the employees. The scheme will be effective from April 1, 2025, and will include assured pensions, family pensions, and minimum pensions to provide financial security for government workers after retirement. Central government employees will be given the option to choose between UPS and NPS. Employees who are already NPS subscribers will be given an option to switch to UPS. Also read | India: BJP urges top poll body to change Haryana election dates, Congress reacts Key features of the Unified Pension Scheme Assured pension Employees who subscribe to the UPS with at least 25 years of service will get an assured pension of 50% of their average basic pay over the last 12 months before retirement. Other employees having a minimum of 10 years of service will be eligible for a pension proportionate to their tenure. Assured family pension UPS provides an assured family pension after their demise, according to which the employee's spouse will be given 60% of the pension drawn before their death. Assured minimum pension Employees who retire before completing 25 years of their service will be assured a minimum pension of Rs 10,000 monthly after retirement with a minimum of 10 years of service. Also read | Home Minister Amit Shah chairs crucial meeting to strengthen anti-Naxal strategy; officials of 7 states attend Inflation indexation For the subscribers of UPS, the assured pension, family pension and minimum pension will be indexed to inflation. Dearness Relief Both serving and retired employees under the UPS will get Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW). Lump sum payment on superannuation Apart from the assured pension, subscribers of UPS will also receive a lump sum payment on superannuation along with gratuity. This payment will amount to 1/10th of the employee's monthly emoluments, which includes pay and Dearness Allowance, as of the date of retirement for every completed six months of service. (With inputs from agencies)

What is Unified Pension Scheme? Here's what you should know

Prime Minister&nbsp;Narendra Modi's government on Saturday (Aug 24) announced a new pension scheme for government employees, called the Unified Pension Scheme (UPS). The central government employees will have the option to choose between the National Pension Scheme (NPS) or the UPS.&nbsp;

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The employees currently subscribed to the old NPS scheme will also be given the option to switch to the new scheme.

While announcing the scheme, Union Minister Ashwini Vaishnaw said that about 2.3 million employees will get benefits under the new regime.

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“Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension…50% assured pension is the first pillar of the scheme…second pillar will be assured family pension…About 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS)…There will be an option for the employees to opt between NPS and UPS…” the minister said.

<h2>What are the key features of the UPS?</h2>

In the new pension scheme, 50 per cent of the average basic pay drawn over the last 12 months prior to superannuation/retirement for a minimum qualifying service of 25 years will be considered the average pension.

The Assured Family Pension for the employees will be 60 per cent&nbsp;of the pension immediately before her/his demise.

Assured Minimum Pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service.

(With inputs from agencies)

Prime Minister Narendra Modi's government on Saturday (Aug 24) announced a new pension scheme for government employees, called the Unified Pension Scheme (UPS). The central government employees will have the option to choose between the National Pension Scheme (NPS) or the UPS.

Prime Minister Narendra Modi's government on Saturday (Aug 24) announced a new pension scheme for government employees, called the Unified Pension Scheme (UPS). The central government employees will have the option to choose between the National Pension Scheme (NPS) or the UPS. #WATCH | Union Minister Ashwini Vaishnaw says, "Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension...50% assured pension is the first pillar of the scheme...second pillar will be assured family… pic.twitter.com/HmYKThrCZV — ANI (@ANI) August 24, 2024 × The employees currently subscribed to the old NPS scheme will also be given the option to switch to the new scheme. While announcing the scheme, Union Minister Ashwini Vaishnaw said that about 2.3 million employees will get benefits under the new regime. Also read: ‘Part of culture,’ Jaishankar schools Western media over PM Modi hugging Putin “Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension…50% assured pension is the first pillar of the scheme…second pillar will be assured family pension…About 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS)…There will be an option for the employees to opt between NPS and UPS…” the minister said. What are the key features of the UPS? In the new pension scheme, 50 per cent of the average basic pay drawn over the last 12 months prior to superannuation/retirement for a minimum qualifying service of 25 years will be considered the average pension. The Assured Family Pension for the employees will be 60 per cent of the pension immediately before her/his demise. Assured Minimum Pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service. (With inputs from agencies)

India unveils new pension scheme for government employees; here are its key features