New Delhi: The central government has found a solution to the opposition's raising the issue of implementation of Old Pension Scheme (OPS) in the recent elections. The government has decided to implement Unified Pension Scheme (UPS) for 23 lakh central government employees, which will be implemented along with the existing NPS. Under UPS, employees will get full pension after working for 25 years.

his is the pension formula

Its formula is that if the employee has served for 25 years, then 50 percent of the average basic salary of the last 12 months of his working year will be given as pension. If the service period is from 10 to 25 years, then the pension amount will be decided on the basis of proportional allocation. In UPS, there is a provision for assured pension, pension to the family, assured minimum pension, linking the pension amount with inflation rate and payment of an assured amount in addition to gratuity at the time of retirement.

Employees will have to contribute 10%

In a way it will be similar to the old pension scheme, but the only difference will be that while employees did not have to contribute in OPS, in UPS they will have to contribute 10 per cent on the lines of the New Pension Scheme (NPS).

Employees will not have to make any additional contribution for UPS, while the central government's contribution to the pension fund has been increased from the current 14 percent to 18.5 percent. This will keep increasing year after year due to inflation rate etc. This will put an additional burden of Rs 6,250 crore on the Center during the year 2025-26 itself.

will be implemented from 1 April

In the election environment, this is being considered a big political gamble by the government. A cabinet meeting chaired by PM Narendra Modi was held late Saturday evening, in which a decision was taken about the Unified Pension Scheme. Information and Broadcasting Minister Ashwini Vaishnav said that this scheme will come into effect from April 1, 2025. This will directly benefit 23 lakh central government employees.

UPS will be beneficial

The government estimates that UPS will be more financially beneficial than NPS for more than 99 percent of the currently working central employees. NPS has been in force since 2004 and all the government employees who have retired since then will get the option of taking pension facility under UPS. If the employees do so, the additional amount and its interest will be paid to them by the Center.

State governments can also implement UPS

Vaishnav said that if the state governments want, they can implement pension scheme for their employees on this basis. If this happens, 90 lakh employees of the state governments can also benefit. It is clear that the responsibility will now fall on the opposition parties, who are making it an issue in the elections, to also announce its implementation in their states with immediate effect.

Elections have been announced in Haryana and Jammu and Kashmir and in the next one or two months, announcements are to be made in Maharashtra and Jharkhand as well. In such a situation, there will be pressure on political parties to include this in their manifesto.

Special things

In UPS, the employees will get assured pension, whereas in NPS there is a provision of getting pension amount as per the amount invested in the market.

On the death of a retired employee, 60 percent of the pension amount will be given to his dependent (husband or wife) as assured family pension.

Irrespective of the number of working years of the employee, the minimum amount of his pension will not be less than Rs. 10 thousand.

Based on the minimum salary as of today, the minimum pension amount is Rs 15 thousand.

The pension amount is linked to the inflation index. That is, if the retail inflation rate increases, the pension amount will also increase.

Pension, family pension and minimum pension will be determined on the basis of dearness allowance.

For every six months of service, a lump sum amount of 10 per cent of the basic salary will be given, which will be in addition to gratuity.

Roughly, for 30 years of service, an employee will get six months' salary separately on retirement.