What is the UPS Pension Calculator?
- A tool, which estimate monthly pension based on Average Monthly Basic Pay (last 12 months before retirement).
- For 10–24 years of service, pension is calculated proportionately.
- Its calculate the Family Pension by 60% of the employee’s pension amount (in case of demise).
- The calculator provides illustrative figures, not exact amounts.
Unified Pension Scheme (UPS) Overview
The Unified Pension Scheme (UPS) is a pension system designed and announced in August 2024 for central-government employees in India. It aims to provide assured pension benefits based on the employee’s length of service and average basic pay. The pension for Central Government employees (effective April 1, 2025), combining features of the Old Pension Scheme (OPS) and National Pension Scheme (NPS) Here’s a detailed breakdown of the scheme:
What is the Unified Pension Scheme (UPS)?
- Fund-Based System: UPS operates as a fund-based pension system, requiring regular contributions from both the employee and the employer.
- Assured Payouts: Unlike market-linked schemes, UPS provides assured pension benefits based on predefined calculations.
- Applicability: It applies to employees in service on or after April 1, 2025, and also extends to past retirees under the National Pension System (NPS) with certain adjustments.
How to Calculate Pension Under UPS
- Basic Pay (P): The 12-month average basic pay before superannuation (e.g., ₹72,800).
- Qualifying Service (Q): The total number of months of service (maximum 300 months or 25 years).
- Assured Monthly Payout: – Formula: 50% of the average basic pay.- Example: For ₹72,800 basic pay, the monthly pension = 50% of ₹72,800 = ₹36,400.
- Family Payout (on demise): – Formula: 60% of the assured monthly payout.- Example: 60% of ₹36,400 = ₹21,840.
Conditions of UPS
- No Additional Benefits Post-Retirement: Employees cannot claim additional financial benefits, policy changes, or concessions post-retirement, even if policies are amended for future retirees.
- Application to Past Retirees: – Retirees under NPS before UPS implementation will receive arrears with interest at Public Provident Fund (PPF) rates.- Monthly top-ups will be adjusted against previous withdrawals and annuities.
- Employees Under Disciplinary Proceedings: Separate provisions will be notified for employees under disciplinary proceedings at the time of superannuation or post-retirement.
Eligibility Under UPS
- Employees in Service: Employees in service on or after April 1, 2025, can choose between continuing under NPS or opting for UPS.
- Past Retirees: Employees who retired under NPS before the operational date of UPS are also eligible, with adjustments for arrears and top-ups.
- Final Choice: Once an employee opts for UPS, the decision is final and cannot be revoked.
Benefits of UPS
- Assured Pension: Provides a guaranteed monthly pension based on the employee’s basic pay and length of service.
- Family Payout: In case of the employee’s demise, the family receives 60% of the assured monthly pension.
- Arrears for Past Retirees: Retirees under NPS will receive arrears with interest at PPF rates.
- Encourages Long-Term Service: Discourages early retirement and promotes longer workforce participation.
Pension Term-Wise
- Monthly Pension: – 50% of the average basic pay (e.g., ₹36,400 for ₹72,800 basic pay).
- Family Pension: – 60% of the monthly pension (e.g., ₹21,840 for ₹36,400 monthly pension).
- Lump-Sum Payment: – Based on the length of qualifying service (e.g., ₹3,64,000 for 25 years of service).
Other Key Information
- Regulations by PFRDA: The Pension Fund Regulatory and Development Authority (PFRDA) will issue regulations to operationalize UPS.
- Illustrative Examples: Detailed examples of payout calculations under various scenarios are provided in the Annexure of the notification.
- Implementation Date: The scheme becomes operational for employees in service on or after April 1, 2025.
Summary
The Unified Pension Scheme (UPS) offers a structured and assured pension system for central-government employees, ensuring financial security post-retirement. It emphasizes long-term service, provides clear calculations for payouts, and extends benefits to past retirees under NPS. Employees must carefully consider their choice between NPS and UPS, as the decision is irreversible.
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