New Delhi, August 26: The Central Government has announced a new Unified Pension Scheme (UPS) for its employees, addressing long-standing dissatisfaction with the New Pension System (NPS), which was introduced in 2004.

The UPS, set to be implemented next year, combines features of both the NPS and the Old Pension Scheme (OPS), offering employees a more secure retirement option. Unified Pension Scheme: Union Cabinet Approves Assured 50% of Salary as Pension for Govt Employees.

Eligibility and Implementation Timeline

Under the UPS, central government employees will be eligible for a full pension after completing 25 years of service. This means that employees who retire in 2029 or later, having joined the service after the NPS was introduced in 2004, will be the first to benefit fully from the new scheme. Those who retire before completing 25 years of service will have their pensions calculated on a pro-rata basis. The minimum pension has been set at Rs 10,000 for those with at least 10 years of service. 8th Pay Commission: What Will be Minimum and Maximum Salary of Govt Employees? Check Latest Update.

Pension Calculation Under the 8th Pay Commission

The UPS will calculate pensions at 50% of the average monthly salary of the 12 months preceding superannuation. With the 8th Pay Commission expected to be introduced in 2026, the minimum salary for Level 1 employees is projected to rise to Rs 34,560, and the maximum for Level 18 employees could reach Rs 4.8 lakh.

For Level 1 employees, with a projected salary of Rs 34,560 and a 20% Dearness Allowance (DA) of Rs 6,912, the pension would be Rs 20,736. For Level 18 employees, with a salary of Rs 4.8 lakh and a DA of Rs 96,000, the pension would be Rs 2,88,000. These calculations assume the implementation of the 8th Pay Commission and a DA increase of 4% annually.

The UPS is seen as a significant step towards addressing the concerns of employees who have been demanding a return to the more secure OPS.

(The above story first appeared on LatestLY on Aug 26, 2024 10:15 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).