The Modi government has made a significant announcement regarding pension schemes. In a cabinet meeting held today, the Unified Pension Scheme (UPS) has been approved to replace the Old Pension Scheme (OPS) and the New Pension Scheme (NPS). This new scheme is aimed at providing full pension benefits to employees who serve in their positions for a minimum of 25 years. The implementation of the UPS is set to benefit 2.3 million central employees, with the scheme expected to take effect from April 1, 2025.

Key Features of the Unified Pension Scheme (UPS)

Centrally, Information and Broadcasting Minister Ashwini Vaishnav provided insights regarding the cabinet meeting. Under the UPS, employees who have completed 10 years of service will be eligible for a pension of ₹10,000. In cases where an employee passes away during their service, their spouse will receive 60% of their pension amount. Furthermore, the government has stated that state governments can also implement this new scheme, and it will not place any additional financial burden on the employees.

Benefits for Long-Service Employees

The government has stipulated that any employee who has completed a minimum of 25 years of service will receive at least 50% of their average salary from the last 12 months as their pension upon retirement. If a pensioner passes away, their family will receive 60% of the pension at the time of death, ensuring some financial stability for their dependents.

NPS Employees Offered Transition to UPS

During the announcement, the Minister indicated that all employees under the NPS will have the option to transition to the UPS. This will apply to anyone who has either retired under the NPS since its inception or is nearing retirement. Moreover, the government has committed to making the necessary arrears payments for those affected. Employees who retired in 2004 will also be eligible for benefits under this scheme.

Additional Financial Provisions

As part of the UPS, a portion of the monthly salary (including both basic pay and Dearness Allowance) equivalent to one-tenth will be accrued for retirement benefits for every six months of service completed. This transition to the UPS has been welcomed by employee organizations who met with the Prime Minister, expressing their satisfaction with the changes made.

Addressing Congress and Previous Promises

The government remarked that Congress had failed to make a concrete promise regarding the OPS, highlighting internal disagreements within their ranks. The Congress party did not include OPS in their manifesto for the Lok Sabha elections. The Prime Minister has emphasized making decisions above electoral politics, asserting that their actions are not influenced by elections, thus not under the purview of the Election Commission.