The Unified Pension Scheme (UPS) is a fund first introduced by the Centre on the basis of the NPS framework, with effect from 1 April 2025. This system is a defined-benefit pension scheme, i.e., it provides assured amounts as pension and not entirely dependent on market returns.
The opportunities to choose UPS are open to those employees who are covered by the NPS. Upon opting for it, the benefit structure, contribution, and payout rules are clearly laid down under CCS Rules, 2025.
Pension Start After Voluntary Retirement
One of the key points in recent discussions was about when the pension would start if the employee took voluntary retirement (VRS) under UPS. As per rule, the pension would start after the person has attained the age of superannuation; the colleagues and employees unions expressed their concern about long durations of stay without pension after retirement.
In this respect, some clarifications are suggested: If a person voluntarily retires after at least 25 years of qualifying service, the assured pension under UPS will be treated as if the employee continued in service until superannuation, i.e., in effect, pension benefits would begin from this notional date of superannuation and not from the later actual date of retirement.
Eligibility & Minimum Qualification
The minimum qualifying period of service to be eligible for assured pension under UPS is set at ten years. For full assured pension, which is 50% of average basic pay for the period of 12 months preceding retirement, the qualifying period is 25 years.
Those with between 10 and 25 years of service will be paid in proportion to full assured pension. The scheme does not apply to persons who resign, are dismissed, or are removed for misconduct.
Meaning Of The Clarification For Employees
It means that employees opting for voluntary retirement after long service (25 years or more) shall no longer have to put in an unsatisfactory wait period till they reach superannuation to start receiving pension benefits. They will be entitled to get pension benefits for the assured pension as though they had been working all through until the regular retirement age.
This way, it fills the financial gap and eases hardship of those who quit service voluntarily before superannuation as they would otherwise, have to go-padding without any pension for quite a few years.
Other Important UPS Features
- Provided that regular contributions have been made, the assured pension amount would be at least ₹10,000/- per month for those retiring after a minimum of 10 years of service, now.
- Equally, there is a share of money payable with a pension in many instances, to cover post-retirement charges.
- Family pension: in the event of death of a pensioner, the spouse is entitled to a portion of certain pension benefits.
Also Read: Post Office Bumper Scheme: Invest Just ₹1,000 in Post Office Scheme and Get Lakhs in Return
