The Unified Pension Scheme (UPS), launched by the government last week, is expected to help increase the pension amount for the central government employees, media reports said.
According to a report by The Times of India, the new scheme will result in a major increase in the pension amount for government employees. Under the UPS, the contribution of the government will climb to 18.5 per cent, which will end up giving a boost of 19 per cent to the pension for the employees, the report noted.
Earlier, the government’s contribution towards pension for the workforce stood at 14 per cent. This rise in pension will be applicable for employees who begin with a monthly income of Rs 50,000, the report stated. These estimates were based on a calculation done by UTI Pension Fund.
Also Read : Tata Sons Manages To Avoid Mandatory Listing Requirement, Says Report. Here's What Happened
The report noted that these calculations didn’t include any dearness allowance and pay commission awards, and therefore, the pension corpus could be even more elevated for the employees. So far, the pension for the government employees is managed by three fund managers, namely, the State Bank of India, Life Insurance Corporation, and the Unit Trust of India.
Notably, the Unified Pension Scheme was approved by the Union Cabinet on August 24, 2024. As part of the provisions, the scheme promises an assured pension for the central government employees, along with a fixed family pension of 60 per cent.
This scheme will help 23 lakh central employees and could further expand to cover 90 lakh employees in its ambit. The UPS will come into effect from April 1, 2025. To be eligible for availing the benefits of the scheme, employees must have completed a minimum of 25 years in service. The scheme provides proportionate pension benefits for employees with a shorter service period, given that they have been in service for a minimum of 10 years.