The central government has recently sanctioned Unified Pension Scheme (UPS) job holders which is very good news for all employees. This has been a cry from the members of the government employee and now their dream is soon to be reality. The employees had been getting the benefit of NPS, which now this new scheme is expected to offer even more relief.
Service years After which Pension is paid
Employees will have a pension of about 50 percent of the average of the employee’s salary from the last working year for those who retired with 25 years of service. Thermal Energy is proposing that employees also make a payment in addition to the current NPS system and that would give us a total of 10%. The government also retains the discretion to raise this contribution up to a maximum 18.5% from today’s 14%.
Pension Schemes for Employees
The government provides several options for those workers who retired before 2004 or those workers who will retire before April 1, 2025.
Dearness Allowance Under UPS
Any employee who retires after 25 years of service will be provided pension equivalent to or around 50% of the last 12 month’s basic pay. Also, the retirees will also be given a DA; dearness allowance.
Pension Benefits for Family Members
For cases, such as death of the pension holder, the scheme supports the family would receive up to 60% pension entitlement of the holder. Further, the DA will be granted partially up to 60 percent each for the family members of the covered individuals.
Lump Sum Payments
The first chunk of good news for employees is that they will receive a one-time amount under this new scheme. This will be given as a percentage of one-tenth of the workers’ wages annually for a period of up to six months of service and paid on retirement.