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Informist, Saturday, Jan. 25, 2025

--Govt notifies introduction of Unified Pension Scheme

--Govt: Unified Pension Scheme to be operational from Apr 1

NEW DELHI - The government Saturday notified the norms to implement the Unified Pension Scheme. In a notification issued by the Department of Financial Services, the finance ministry detailed the eligibility, benefits and the assured return structure of the scheme, which is set to be operational from Apr. 1. 

The Unified Pension Scheme aims to provide an assured pension, family pension, and an assured minimum pension for government employees. To address the demand for assured returns, the Cabinet decided to roll out this scheme, in which 50% of the average basic pay drawn in the last 12 months prior to superannuation for a minimum qualifying service of 25 years would be given as an assured pension. For those with less than 25 years but over 10 years of service, the assured sum would be a proportionate sum calculated on a pro-rata basis.

The scheme also assures family pension, under which 60% of the pension will be given to the immediate family after the demise of an employee. The third feature is an assured minimum pension, which is devised to address the issue of employees with government service for at least 10 years. Under this, 10,000 rupees will be given to such employees as a minimum assured pension. 

While employees' contribution to the Unified Pension Scheme will continue to be at 10%, the Centre's contribution will be raised to 18.5% from 14%. There is a provision that will allow the Centre to revaluate its contribution once every three years, but there is no opportunity to tweak staff's contributions. Going forward, central government employees will be given the option to choose between the National Pension System and the Unified Pension Scheme. They will get the option to switch from the National Pension System to the Unified Pension Scheme or vice versa only once.

The notification detailing the implementation of the scheme is also applicable to states. After the Cabinet made the new scheme's announcement in August, Maharashtra rushed to announce its plan to implement the scheme, overnight. The origin of the unified scheme lies in the discontent among states, particularly those ruled by Opposition parties, with the New Pension Scheme not having a 'defined benefit' feature like the Old Pension Scheme. This became a political hot potato and forced the Centre to set up a committee led by current Cabinet Secretary T.V. Somanathan to look into the matter.  End

Reported by Priyasmita Dutta

Edited by Vandana Hingorani

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