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Informist, Tuesday, Jan. 28, 2025

NEW DELHI – The Pension Fund Regulatory and Development Authority on Tuesday sought public comments on draft norms to lay down the framework for operationalising the Unified Pension Scheme. The pension sector regulator will be responsible for implementing the newly introduced scheme for government staff, set to be operational from April. 

As per the notification seeking public comments, the feedback on the operations of the new pension plan has to be submitted by Feb. 17. According to an official at PFRDA, the public comments will first go to the Pension Advisory Committee, and then to the PFRDA Board for final approval. 

The government on Saturday notified the norms to implement the Unified Pension Scheme, detailing the eligibility, benefits and the assured return structure of the scheme. In the draft issued by PFRDA, the regulator sought public comments on details like structure of forms, disclosures and documents. 

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 14.0%. 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.  End

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

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