This scheme of Modi government is going to start from next month, Know the details 

There’s some exciting news for central government employees! Starting next month, in April, a new rule is set to kick in. The Union Finance Minister has announced the rollout of the Unified Pension Scheme (UPS) for central government employees, effective from April 1, 2025. This new scheme will serve as an alternative to the current National Pension System (NPS) and is designed to offer better financial security for employees after they retire.

So, what’s the Unified Pension Scheme all about? It’s a fresh framework aimed at delivering more stable and dependable pension benefits compared to the NPS. With this scheme, employees can expect to receive a pension that amounts to 50% of their last drawn salary.

Now, let’s compare NPS and the new UPS. The NPS is market-driven, meaning the pension amount fluctuates based on market conditions. Employees contribute 10%, while the government chips in 14%. On the flip side, the UPS isn’t tied to market performance and guarantees a pension of 50% of the last salary. Plus, the government’s contribution has increased to 18.5%, while the employee contribution stays the same. Just a heads up, you’ll need at least 10 years of service to qualify for a pension under the UPS.

Who can take advantage of the Unified Pension Scheme? It’s open to all central government employees currently enrolled in the NPS who want to make the switch to this new scheme.

So, why was this change made? Back in April 2023, a panel led by Finance Secretary TV Somanathan suggested a revamp of the NPS, which ultimately led to the establishment of the Unified Pension Scheme, aimed at enhancing financial security for government employees.

The Unified Pension Scheme is set to kick in on April 1, 2025. Cabinet Secretary TV Somanathan mentioned that it will be advantageous for employees in 99% of situations, though there might be a few unique cases still covered by the NPS. This government move is anticipated to help around 2.3 million government workers and 1.2 million pensioners, aiming to ease their financial concerns in retirement and enhance their quality of life.