The Union Cabinet on 24 August approved the Unified Pension Scheme (UPS). The scheme is based on the recommendations of the T.V. Somanathan committee report.
The salient features of the UPS are:
- Assured pension: 50% of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service period upto a minimum of 10 years of service.
- Assured family pension: @60% of pension of the employee immediately before her/his demise.
- Assured minimum pension: @10,000 per month on superannuation after minimum 10 years of service.
- Inflation indexation: Dearness Relief based on All India Consumer Price Index for Industrial Workers (AICPI-IW) as in case of service employees.
- Lump sum payment at superannuation in addition to gratuity: 1/10th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service. This payment will not reduce the quantum of assured pension.
- Contribution: The key difference between the OPS and the UPS is that OPS liabilities were unfunded and entailed no contributions from employees or the employer. The UPS, will be a contributory scheme, with employees’ chipping in 10% of salary and the government bringing in 18.5% of salary.
