GOI announces Unified Pension Scheme effective April 2025 to provide assured benefits

The Central Government announced a new pension scheme - the Unified Pension Scheme (UPS), which will provide government employees with assured pensions, family pensions, and a guaranteed minimum pension. This scheme will take effect from April 1, 2025.

The scheme which was approved by the Union Cabinet on August 24 guarantees a pension of 50 per cent of the average basic pay drawn over the last 12 months prior to superannuation, provided the employee has completed a minimum of 25 years of service. The pension will be proportionate for those with lesser service.

It also ensures a family pension of 60 per cent of the pension of the employee immediately before their death.

The new pension scheme guarantees an assured minimum pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service.

About 23 lakh central government employees would benefit from the UPS, Railways Minister Ashwini Vaishnaw said.

"Today, the Union Cabinet has approved UPS for government employees providing for assured pension. 50 per cent assured pension is the first pillar of the scheme and the second pillar will be assured family pension," he said.

"There will be an option for employees to opt between the National Pension System (NPS) and UPS," he added.

Under the scheme, there will be a lump-sum payment at superannuation in addition to gratuity and one-tenth of monthly emolument (pay + DA (Dearness Allowance)) on the date of superannuation for every completed six months of service. This payment will not reduce the quantum of assured pension for employees.