Pension scheme : The next fiscal year will be quite remarkable for central personnel. We’re stating this since the government’s Unified Pension Scheme (UPS) will be implemented on April 1. The adoption of this system will provide central personnel with a new pension choice. Let us know the specifics.
About the Integrated Pension Scheme.
This system provides for a guaranteed pension equal to 50% of the average basic salary obtained in the 12 months before retirement. Recently, the Pension Fund Regulatory and Development Authority (PFRDA) published a notification on this subject. This notification follows the UPS notification published by the government on January 24, 2025, for central government personnel covered with the National Pension System (NPS). According to PFRDA, the UPS rules would go into force on April 1, 2025.
Table of Contents
Available from April 1
These guidelines allow Central Government employees, including those who are already in service as of April 1, 2025, to enroll in NPS, as well as those hired in Central Government services on or after April 1, 2025. Enrollment and claim forms for all of these types of Central Government employees will be available online on the Protege CRA website beginning April 1, 2025. Employees can also submit the paperwork physically.
What’s in the alerts?
According to the notification, the UPS or promised payment option will not be accessible in the event of an employee’s removal, dismissal, or resignation from service. The notification specifies that the complete assured payout rate will be 50% of the average basic salary of the 12 months immediately before retirement, with a minimum qualifying service of 25 years. The notice will let 23 lakh government employees to pick between UPS and NPS. NPS went into effect on January 1, 2004.
How does it vary from the old pension scheme?
Let us remind you that the Old Pension Scheme (OPS), which was in force before to January 2004, provided employees with a pension equal to 50% of their last basic wage. UPS, unlike OPS, is of a contributing character. Employees will be required to contribute 10% of their base income and dearness allowance, with the employer (Central Government) contributing 18.5%. However, the final payment is determined by the market return on the fund, which is primarily invested in government bonds.
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