NEW DELHI: The Union Cabinet on Saturday approved an assured 50 per cent of salary as pension for 23 lakh government employees who joined service under the National Pension System (NPS).
The National Pension System is applicable for government employees joining the service after April 1, 2004. It was based on the premise of contribution rather than defined benefit applicable for employees prior to the NPS.
Announcing Cabinet decisions, Information and Broadcasting Minister Ashwini Vaishnaw said the Unified Pension Scheme (UPS) announced that government employees will now be eligible to get 50 per cent of the average basic pay drawn over the last 12 months before the superannuation as pension.
For this full pension or 50 per cent of pay as the pension, he said, the eligibility service length will be 25 years.
However, he said, it would be proportionate for a lesser service period up to a minimum of 10 years of service.
NPS subscribers can now opt for the Unified Pension Scheme (UPS), which offers assured pension applicable from the beginning of the next financial year.
Last year, the finance ministry set up a committee under Finance Secretary TV Somanathan to review the pension scheme for government employees and suggest any changes, if needed, in light of the existing framework and structure of the National Pension System.
Several non-BJP-ruled states have decided to revert to the DA-linked Old Pension Scheme (OPS) and also employee organisations in some other states have raised demand for the same.
Briefing media, Cabinet Secretary-designate TV Somanathan said the new scheme is applicable from April 1, 2025.
The benefits of the Unified Pension Scheme are applicable for those retired and retiring till March 31, 2025, with arrears, he added.
Highlights of Unified Pension Scheme:
Assured pension of 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
Proportionate for lesser service up to a minimum of 10 years of service
Assured Family Pension @ 60 per cent of pension of the employee immediately before her/his demise
Assured Minimum Pension @ Rs 10,000 per month on superannuation after minimum 10 years of service
Briefing journalists after the Cabinet meeting, Union Minister Ashwini Vaishnaw said the Centre constituted a committee which held as many as 100 meetings with several top organisations, including the RBI and the World Bank, on the issue.
The UPS has been approved by the Cabinet based on the recommendations of this committee.
“Today, the Union Cabinet has approved the Unified Pension Scheme (UPS) for government employees providing for an assured pension. A 50 per cent assured pension is the first pillar of the scheme, while the second pillar will be an assured family pension,” the Minister explained.
On the spadework that went into the new scheme, the Minister said, “Government employees demanded some changes in the New Pension Scheme. For this, PM Modi constituted a committee under the chairmanship of Cabinet Secretary T.V. Somanathan. This committee held more than 100 meetings with different organisations and nearly all the states and the Unified Pension Scheme has been formulated based on these recommendations.”
“There’s a difference between how PM Modi works and how the opposition functions. Unlike the opposition, PM Modi believes in holding extensive consultations,” Vaishnaw added.
Cabinet nods 50% salary as pension for NPS employees
