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UPS Calculation: The central government has launched a new pension scheme for employees, which is parallel to the National Pension Scheme (NPS). This scheme will come into effect from April 1, 2025 i.e. FY 2026. The central government has announced this scheme to give a fixed pension to government employees. Under the Unified Pension Scheme (UPS), government employees will be given a fixed pension. If the employee dies, there is also a provision for family pension (assured family pension). Apart from this, minimum assured pension will also be given.
What is Unified Pension Scheme (UPS)?
On Saturday, the Cabinet approved the Unified Pension Scheme. Under the UPS, now retired employees will be given 50% of their average basic salary of 12 months as a fixed pension. However, to get this pension, employees will have to work for at least 25 years.
At the same time, if the employee dies, a fixed pension will also be given to the family, which will be 60 percent of the pension received by a retired government employee.
Minimum assured pension will also be given, that is, people who work for only 10 years will be given a minimum pension of Rs 10,000.
Who will benefit from this?
Under the Unified Pension Scheme, about 23 lakh central employees will get its benefit. Even if the state governments implement this scheme, its benefits will be given. The Unified Pension Scheme or UPS is designed to provide better financial security to government employees by guaranteeing fixed pension and family pension. Apart from this, as inflation increases, there is also a provision for increase in pension under this scheme.
You should choose either UPS or NPS. If you choose UPS once, you will never be able to choose NPS. On the other hand, if you choose NPS, you will never be able to choose UPS.
How much contribution do I have to make to UPS?
Under this government scheme, contribution will have to be made from salary just like NPS. Government employees have to contribute 10 percent under UPS, which is also given under NPS. However, the government has increased its contribution in UPS from 14 percent to 18.5 percent. This means that employees can get a good pension after retirement.
If the basic salary is Rs 50,000 then how much pension will be given?
As stated under this scheme, after retirement, employees will be given 50 percent of the average basic salary of 12 months as pension. If we calculate it this way, if you are a government employee and choose UPS instead of NPS and your average basic salary of the last 12 months is Rs 50,000, then you will get a pension of Rs 25,000 every month after retirement under this scheme. However, after this Dearness Relief (DR) will be added separately.
On the other hand, if the employee dies and his monthly pension is Rs 30,000, then the family will get a fixed monthly pension of Rs 18,000, because after the death of the employee, there is a provision to give 60 percent of the last pension received by the employee to the family as pension.