Unified Pension Scheme: In a significant development for government employees, the Union Cabinet on Saturday approved the Unified Pension Scheme (UPS), offering an assured 50 per cent of the salary as pension for 23 lakh government employees who joined service under the National Pension System (NPS). This scheme will be applicable from 1 April 2025, marking a significant shift in the pension structure for central government employees.


Announcing the Cabinet's decision, Union Minister for Information and Broadcasting Ashwini Vaishnaw highlighted the key features of the UPS, stating, "Government employees will now be eligible to receive 50 per cent of the average basic pay drawn over the last 12 months before superannuation as pension. For this full pension, the eligibility service length will be 25 years, with proportionate benefits for a service period of up to a minimum of 10 years."






The National Pension System (NPS), which was introduced for government employees joining after 1 April 2004, is based on the principle of contribution rather than the defined benefit scheme that was applicable to employees under the Old Pension Scheme (OPS). The new UPS will allow NPS subscribers the option to switch to this assured pension scheme starting from the next financial year.


The approval of the UPS follows recommendations from a committee set up by the finance ministry under Finance Secretary T.V. Somanathan, which was tasked with reviewing the pension scheme for government employees. The committee was established in response to demands for reforms in the pension structure, especially considering several non-BJP-ruled states have reverted to the OPS, which is linked to dearness allowance.


Unified Pension Scheme's Salient Features



  • The UPS will offer a minimum pension of ₹10,000 per month after a minimum of 10 years of service. "This pay is to be proportionate for lesser service period up to a minimum of 10 years of service," a statement informed.

  • Assured family pension at 60 per cent of the employee's pension.

  • The scheme includes inflation indexation based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), ensuring that pensions and family pensions are adjusted for inflation.

  • Retirees will also receive a lump sum payment at superannuation.

  • Gratuity, equivalent to one-tenth of monthly emoluments (pay + DA) for every completed six months of service.


Prime Minister Narendra Modi expressed his support for the new scheme on X, stating, "We are proud of the hard work of all government employees who contribute significantly to national progress. The Unified Pension Scheme ensures dignity and financial security for government employees, aligning with our commitment to their well-being and a secure future."




Cabinet Secretary-designate T.V. Somanathan confirmed that the benefits of the UPS are applicable to those retiring by 31 March 2025, with arrears being provided.