With reference to the Unified Pension Scheme (UPS), recently notified by the Union Finance Ministry, consider the following statements —
- The Unified Pension Scheme (UPS) applies only to future Central Government employees and not to those currently under the National Pension System (NPS).
- Under the UPS, an assured payout of 50% of the average basic pay drawn during the last 12 months prior to retirement is guaranteed, provided the employee has completed at least 25 years of service.
- The Unified Pension Scheme (UPS) is non-contributory and entirely funded by the central government.
Which of the statements given above is/are correct?
Explanation – The Unified Pension Scheme (UPS), notified by the Ministry of Finance on January 24, 2025, is applicable to both new recruits joining after April 1, 2025, and existing Central Government employees under the National Pension System (NPS), who are given a one-time option to switch. This makes statement 1 incorrect. The scheme guarantees a pension of 50% of the average basic pay over the last 12 months before retirement for employees with at least 25 years of service, making statement 2 correct. The UPS is a contributory scheme, with a 10% contribution from the employee and an 18.5% contribution from the central government, which makes statement 3 incorrect.
Explanation – The Unified Pension Scheme (UPS), notified by the Ministry of Finance on January 24, 2025, is applicable to both new recruits joining after April 1, 2025, and existing Central Government employees under the National Pension System (NPS), who are given a one-time option to switch. This makes statement 1 incorrect. The scheme guarantees a pension of 50% of the average basic pay over the last 12 months before retirement for employees with at least 25 years of service, making statement 2 correct. The UPS is a contributory scheme, with a 10% contribution from the employee and an 18.5% contribution from the central government, which makes statement 3 incorrect.