Unified Pension Scheme to put a Rs 6,250-cr pressure on govt
Unified Pension Scheme (UPS), set to provide an assured pension to 23 lakh eligible central government employees, will bring an additional financial burden of Rs 6,250 crore per year to the exchequer. The UPS, effective from April 1, 2025, will increase the government's contribution from the current 14 percent to 18.5 percent, reported PTI, quoting Union Minister Ashwini Vaishnaw.
Despite the government's increased contribution, employees' contribution will remain unchanged at 10 percent of their basic salary. Additionally, employees retiring before March 31, 2025, under the National Pension System (NPS), will receive an arrear of Rs 800 crore if they opt for UPS.
The scheme ensures a minimum pension of Rs 10,000 per month for those with at least 10 years of service. Moreover, it provides an assured family pension in the event of a pensioner's demise, with a provision for dearness relief linked to the All India Consumer Price Index for Industrial Workers (AICPI-IW).
The NPS, in effect from January 1, 2004, is a contributory scheme while pension scheme prior to this was defined where the government promised to pay 50 per cent of the last-drawn basic pay, irrespective of the corpus.
However, UPS envisages to provide assured pension depending on the length of the service as in this case the pension payout is linked to the corpus accumulated.
The scheme approved by the Union Cabinet on Saturday is a sort of fulfilling long-pending demands of government employees ahead of the assembly elections in Haryana and Jammu
