Indian Ministry of Finance (Department of Financial Services) on January 24, 2025, has introduced the Unified Pension Scheme (UPS), 2025, effective from April 01, 2025. UPS will ensure that Central Government employees receive a guaranteed pension, something NPS never promised.
๐๐๐ฒ ๐๐ข๐ ๐ก๐ฅ๐ข๐ ๐ก๐ญ๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐๐ก๐๐ฆ๐
๐๐ฅ๐ข๐ ๐ข๐๐ข๐ฅ๐ข๐ญ๐ฒ: Central Government Employees under NPS opting for this scheme, with assured payouts in cases of superannuation (10+ years of service), voluntary retirement (25+ years), or retirements under FR 56(j). The scheme shall not be applicable in cases of dismissal, removal, or resignation.
๐๐๐ฒ๐จ๐ฎ๐ญ ๐๐๐ง๐๐๐ข๐ญ๐ฌ: Assured payouts at 50% of the average basic pay for 25+ years of service, subject to a minimum monthly payout of โน10,000 after qualifying service. Proportionate payouts are available for shorter service periods and voluntary retirement payout will start at the normal superannuation age.
๐๐ฎ๐๐ฅ ๐๐จ๐ซ๐ฉ๐ฎ๐ฌ ๐๐จ๐๐๐ฅ: Employee and Government contribute 10% each of basic pay + DA, with an additional 8.5% from the Government towards a pool corpus. Investment options are available for individual corpus, while the Government manages the pool corpus.
๐๐ฉ๐๐ซ๐๐ญ๐ข๐จ๐ง: Existing NPS corpus will be transferred to the UPS upon opting in. A benchmark corpus will be determined to ensure sufficient funds for assured payouts. At retirement, employees must transfer the benchmark corpus value to the pool corpus. Any surplus remains with the employee, while deficits require additional contributions.
๐๐๐๐ข๐ญ๐ข๐จ๐ง๐๐ฅ ๐
๐๐๐ญ๐ฎ๐ซ๐๐ฌ:
๐
๐๐ฆ๐ข๐ฅ๐ฒ & ๐๐๐๐ข๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐๐ง๐๐๐ข๐ญ๐ฌ: 60% of the assured payout is provided to the spouse in case of the payout holderโs demise.
๐๐๐ฌ๐ญ ๐๐๐ญ๐ข๐ซ๐๐๐ฌ: Past retirees under NPS can also benefit, with arrears and interest adjustments made for earlier withdrawals or annuities.
The scheme is operational from April 2025, and detailed guidelines will be issued by the Pension Fund Regulatory and Development Authority (PFRDA). This initiative reinforces the Governmentโs commitment to financial security for its employees while offering flexibility and clarity in pension-related matters.
For insights or expert guidance on the regulatory implications of this scheme, feel free to reach out to Regstreet Law Advisors at info@regstreetlaw.com.
Copy of the notification is enclosed.