Cabinet clears Unified Pension Scheme; decision ensures dignity & financial security for government employees, says PM Modi

In a significant decision, the Centre on Saturday approved the Unified Pension Scheme (UPS), which provides an assured pension, a minimum pension and an assured family pension.

With the Unified Pension Scheme coming into force on April 1 next year, the central government employees covered under National Pension Scheme (NPS) will have choice to continue with it or opt for the new scheme.

Briefing the media after a meeting of the union cabinet, Information and Broadcasting Minister Ashwini Vaishnaw said about 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS). He said the scheme has been evolved with extensive consultations.

Answering a query about whether permission had been obtained from the Election Commission to make the announcement about UPS, he said that the scheme was not linked to the assembly elections in Jammu and Kashmir and Haryana.

"Today the Union Cabinet has approved Unified Pension Scheme (UPS) for government employees providing for the assured pension...50 per cent assured pension is the first pillar of the scheme...second pillar will be assured family pension...About 23 lakh employees of the central government would benefit from the Unified Pension Scheme (UPS)...There will be an option for the employees to opt between NPS and UPS," he said.

Referring to Assured Pension, he said it will be 50 per cent of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years.

It will be proportionate for lesser service period upto a minimum of 10 years of service.

The Assured Family Pension would be calculated at the rate of 60 per cent of pension of the employee immediately before her or his demise.

Assured Minimum Pension will be Rs 10,000 per month on superannuation after minimum 10 years of service.

The cabinet meeting was chaired by Prime Minister Narendra Modi.

He said in a post on X later, he said that the Unified Pension Scheme ensures dignity and financial security for government employees.

"We are proud of the hard work of all government employees who contribute significantly to national progress. The Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future," he said.

PM Modi met a delegation of staff side of Joint Consultative Machinery for Central Government employees on day the government took the significant decision.

Shiv Gopal Mishra, Secretary (Staff Side), National Council (Joint Consultative Machinery) lauded Unified Pension Scheme.

"Today, we are very thankful...maybe across the nation, it would be the first time a PM has invited the delegation of Staff Side of Joint Consultative Machinery to interact. This is a very important moment for 32 lakh central employees we represent. He has spoken about assured pension system...in the coming days, those who will retire and those who have already retired, they will get 50 per cent assured pension...he also said that whenever there is a requirement, whole government will be available for central government employees," he said.

Defence Minister Rajnath Singh also lauded UPS and said it will benefit lakhs of central government employees and provide financial security to them and their families.

"The Union Cabinet chaired by Prime Minister @narendramodi today has approved the Unified Pension Scheme (UPS) for government employees which is a significant move that promises an assured pension for the central government employees," he said.

"The scheme will benefit lakhs of central government employees and provide financial security to them and their families. I thank the Prime Minister for taking this bold decision," he added.

According to an official release, there will be inflation indexation on assured pension, on assured family pension and assured minimum pension under UPS.

"Dearness Relief based on All India Consumer Price Index for Industrial Workers (AICPI-IW) as in case of service employees," it added.

There will be lump sum payment at superannuation in addition to gratuity.

"One tenth of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service. This payment will not reduce the quantum of assured pension," the release said.

Finance Minister Nirmala Sitharaman had said earlier that the committee to review NPS has made considerable progress in its work.

"With a constructive approach, a solution will be evolved that addresses the relevant issues while maintaining fiscal prudence to protect the common citizens," she said.