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The Union Cabinet has approved a guaranteed pension of 50 per cent of the salary for 23 lakh government employees joining service under the National Pension System (NPS). The National Pension System is applicable for government employees joining service after April 1, 2004.
New Delhi. The Union Cabinet has approved a guaranteed pension of 50 per cent of the salary for 23 lakh government employees joining service under the National Pension System (NPS). The National Pension System is applicable to government employees joining service after April 1, 2004. This pension scheme provides benefits based on contributions instead of the defined benefit applicable to employees before NPS.
Announcing the Cabinet decisions, Information and Broadcasting Minister Ashwini Vaishnav said that under the Unified Pension Scheme (UPS), government employees will now be entitled to get 50 per cent of the average basic salary received in the last 12 months before retirement as pension. He said that the minimum service period to get 50 per cent of the salary as pension should be 25 years. He said that however, pension will be given proportionately for a minimum service period of up to 10 years. NPS account holders can now opt for UPS, which will give assured pension from the beginning of the next financial year.
Last year, the Finance Ministry had constituted a committee headed by Finance Secretary T V Somanathan to review the pension scheme for government employees and suggest any changes in the existing structure of the National Pension System. Many non-BJP ruled states have decided to revert to the old pension scheme (OPS) linked to dearness allowance and employee unions have raised the demand in some other states as well. Cabinet Secretary-designate T V Somanathan said the new scheme is effective from April 1, 2025.
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