Sun Jan 26 11:56:16 UTC 2025: ## India Announces Unified Pension Scheme for Central Government Employees

**New Delhi, January 25, 2025** – The Indian government has officially notified the Unified Pension Scheme (UPS), a new pension plan for central government employees, which will come into effect on April 1, 2025. The announcement comes ahead of the Union Budget 2025, to be presented by Finance Minister Nirmala Sitharaman on February 1st.

The UPS, launched in August 2024, aims to strike a balance between the Old Pension Scheme (OPS) and the National Pension System (NPS). It offers a guaranteed pension to retirees, enhancing their financial security. The scheme applies to central government employees currently covered under the NPS who opt into the UPS. Employees can choose to either join the UPS under the NPS or continue with the NPS without the UPS option. Those choosing the UPS will not be eligible for any other policy concessions or financial benefits.

According to the gazette notification, the government’s contribution under the UPS will be 18.5% of an employee’s basic salary, compared to the 14% under the NPS. This increase is expected to add an initial burden of ₹6250 crore to the government’s exchequer in the first year.

**Key Features of UPS:**

* **Guaranteed Pension:** 50% of the average basic salary of the last 12 months of service, payable for life after at least 25 years of service. Pension will be adjusted periodically for inflation (Dearness Relief – DR).
* **Minimum Pension:** A minimum pension of ₹10,000 will be provided for employees with 10 or more years of service.
* **Family Pension:** 60% of the employee’s pension will be paid to a designated family member after the employee’s death.
* **Lump-Sum Payment:** A lump-sum payment, in addition to gratuity, will be provided upon retirement, calculated at 1/10th of the basic salary and dearness allowance for every six months of service. This gratuity amount may be lower than under the OPS.

The UPS is expected to benefit approximately 2.3 million central government employees. The government claims the scheme will provide a more secure retirement for its workforce.

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