Kolkata: A significant change in the pension system of its employees was announced by the Centre on January 24 this year. Titled Unified Pension Scheme, or UPS, the scheme is available to Central government employees who can switch from NPS to UPS by following a simple process. While it was initially highlighted that that those who would retire on or before 31 March 2025 can switch from NPS to UPS, it has also been said that future employees of the Central government, who might be already enrolled for the NPS, can easily switch to the UPS.
Those who would enroll for the UPS will get benefits such as guaranteed pension, a minimum pension and a family pension. The rules state that employees with 25 years or more of service will get a pension equivalent to 50% of their average basic pay drawn in the last 12 months before retirement. Those who have worked for at least 10 years 2for the central government will get a minimum pension of Rs 10,000. In case of the death of an employee, the next of kin of the deceased will get 60% of the pension that the employee was getting just before expiry.
Simple process of transition
Those who want to migrate from the NPS to the UPS can do so online and with minimum hassle. The facility is available with the official CRA (Central Recordkeeping Agency) portal. The address for the dedicated online portal is https://www.npscra.nsdl.co.in/ups.php which will help accomplish the migration process. The process is simple and menu-driven.
Under the Unified Pension Scheme, when an employee of the Central government retires, he/she will receive pension from the savings, which will be somewhat similar to a systematic withdrawal plan (SWP) that is popular in mutual funds. In the event that savings are exhausted before the death of the employee/pensioner or his/her spouse, a government-managed pool will support the pension.
The rules have also mentioned that dearness relief will be available on UPS, which means it will be linked to the prevalent rate of inflation. Moreover, a Central government employee will not be eligible for UPS in two cases. One, if the employee superannuates before completing 10 years of service which is the threshold duration for pension. Two, if the employee is removed/dismissed from service.
Announced on January 24 2025, the Unified Pension Scheme, or UPS, is an alternative to the National Pension System, or NPS. It has kicked in from April 1, 2025 and central government employees already covered under NPS can shift to UPS if they want. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
