Govt transforms NPS to Unified Pension Scheme

In a bonanza to 23 lakh central government employees, the Union Cabinet on Saturday approved an assured pension of 50 per cent of salary for those who joined the service after January 1, 2004, under the National Pension System (NPS).

Fulfilling long pending demands of government employees ahead of assembly elections in Haryana and Jammu and Kashmir, the Cabinet meeting, chaired by Prime Minister Narendra Modi, approved the Unified Pension Scheme (UPS), which assures guaranteed pension.

Employees opting for UPS would be eligible for an assured pension of 50 per cent of the average basic pay drawn over the last 12 months before the superannuation for a minimum qualifying service of 25 years.

This pay is to be proportionate for a lesser service period up to a minimum of 10 years of service, Information and Broadcasting Minister Ashwini Vaishnaw said.

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

This option scheme will benefit 23 lakh central government employees, he said, adding that the number would rise to 90 lakh if state governments want to join the scheme.

Announcing other features of UPS, Vaishnaw said an assured family pension will be provided to the spouse of a deceased employee. In addition, there would be inflation indexation on assured pension, assured family pension, and assured minimum pension.

There will be Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) as in the case of serving employees, the minister said.

In addition to gratuity, he said, employees at the time of retirement would be eligible for a lump sum amount — 1/10th of monthly emolument (pay + DA) as on the date of superannuation for every completed six months of service.

With the addition of all these features, it marks the transformation of the National Pension System (NPS), which promised pensions based on the contribution made by employees and the government.

The announcement came against the backdrop of several non-BJP states deciding to revert to the DA-linked Old Pension Scheme (OPS) and employee organisations in some other states raising demand for the same.

NPS has been implemented for all government employees except those in the armed forces joining the central government on or after January 1, 2004.

Most state/Union Territory governments have also notified NPS of their new employees.

Under the Old Pension Scheme (OPS), retired government employees received 50 per cent of their last drawn salary as monthly pensions. The amount keeps increasing with the hike in the DA rates. OPS is not fiscally sustainable as it is not contributory, and the burden on the exchequer keeps mounting.

To improve the pension system for government employees, the finance ministry last year set up a committee under Finance Secretary TV Somanathan to review the pension scheme for government employees and suggest any changes, if needed, in the light of the existing framework and structure of the National Pension System.

Briefing media, Cabinet Secretary-designate Somanathan said the new scheme will be applicable from April 1, 2025.

The benefits of the Unified Pension Scheme will apply to those who are retired or retiring under the NPS till March 31, 2025. They will be eligible for arrears, he said.

There would not be an additional burden on employees opting for UPS. The employee’s contribution would remain 10 per cent, while the government contribution would go from 14 per cent to 18.5 per cent.

Expenditure for arrears would be Rs 800 crore approximately, and Rs 6,250 crore additional burden on the government for the enhanced contribution of 18 per cent, Somanathan added.

If the state government joins UPS, they would bear the additional burden for those employees for the assured pension. (PTI)

Hot this week

Pay hike of Assam ministers, MLAs likely as 3-member panel submits report

Full report likely by Oct 30 Guwahati Sept 25: There...

Meghalaya Biological Park Inaugurated After 25 Years: A New Chapter in Conservation and Education

Shillong, Nov 28: Though it took nearly 25 years...

Meghalaya man missing in Bangkok

Shillong, Jan 10: A 57-year-old Meghalaya resident, Mr. Treactchell...

ANSAM rejects Kuki’s separate administration demand, says bifurcation not acceptable

Guwahati, Sept 8: Rejecting the separate administration demand of...

Meghalaya’s historic fiber paves the way for eco-friendly products and sustainable livelihoods

By Roopak Goswami Shillong, Oct 25: From making earbuds to...

NTPC’s Bongaigaon plant awarded for healthcare promotion, environment protection

Guwahati, June 29: State-run power major NTPC Limited's Bongaigaon...

Diksha Dagar in top 10 after three rounds in German Masters

Hamburg (Germany), June 29: Diksha Dagar held onto her...

India has set USD 1 bn turmeric export target by 2030: Union Minister Amit Shah

Hyderabad, June 29: Union Home Minister Amit Shah on...

UK police reviewing rapper’s anti-Israel comments at Glastonbury Festival

London, June 29: British police said they were examining...

Trump calls for deal on war in Gaza as signs of progress emerge

Tel Aviv, June 29: US President Donald Trump on...

162 students trapped in inundated residential school in Jharkhand after heavy rain rescued

Jamshedpur (Jharkhand), June 29: At least 162 students trapped...

5.3 magnitude quake hits Pakistan; 5 people injured

Karachi, June 29: At least five people were injured...
spot_img

Related Articles

Popular Categories

spot_imgspot_img