Unified Pension Scheme (UPS) was approved on 24Aug’24 by the Indian government. The scheme was welcomed wholeheartedly by the government employees who will be main beneficiary as the money will provide them financial security and stability in the future.

UPS implementation will come into effect from April 1, 2025 benefitting 2.3 million government employees. Under this scheme, employees who have worked for 25 years will receive full benefits. 50% of the basic pay in the form of pension based on the last 12 months of employment will be given. Rs. 10000 will be given to the employees with 10 years of employment.

In case of demise of the government employee, his/her family i.e. dependents will get pension of 60%. Employees can make selection between NPS and UPS. NPS subscribers will also get UPS advantage. State governments are also allowed to implement this model.

Check out: Differences between NPS vs OPS vs UPS

Biggest advantage of UPS is that employees won’t need to make separate contributions and will continue to remain at 10% like NPS. And the cost will be borne by the central government. Government employees will benefit from inflation indexing.

Summary of UPS Benefits:

• Government employees who have worked for at least 25 years will get 50% of their average basic salary from the last 12 months as pension before retirement.
• At a minimum, employee has to work with government for 10 years.
• If any employees leaves his/her government job after 10 years of employment, will get pension of atleast Rs. 10000.
• If the employee dies, 60% of the pension amount will be given to the dependent.
• After retirement, individual will get gratuity along with lump sum payment.
• Inflation indexing benefit will also be received by the government employee.
• No additional contributions is required by the employee and will be borne by the government of India.
• For every six months of service, one-tenth of the monthly salary (salary + DA) will be added and paid upon retirement.

Hi, I am Nikesh Mehta, owner and writer of this site. I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at nikeshmehta@allonmoney.com.