The Integrated Pension Scheme was announced by the Centre on 24th August. A new claim has been made in a report regarding this scheme. According to this, government employees who subscribe to the Integrated Pension Scheme will see a big increase in their pension cheques.
According to a Times of India report, the government’s contribution under UPS will increase from the current 14 per cent to 18.5 per cent, which is likely to lead to an overall increase of 19 per cent in the pension of employees starting with a monthly salary of ₹50,000.
The report considers a 3 per cent annual wage increase and an 8 per cent compound annual growth rate of 8 per cent, but the calculations exclude dearness allowances and pay commission awards. This means the pension fund could be even higher, the report said.
Currently, the central government has three pension fund managers for its employees including State Bank of India, Life Insurance Corporation of India and Unit Trust of India. The Union Cabinet has given the green signal to UPS for government employees, which is likely to benefit 23 lakh central employees and the number could rise to 90 lakh if state governments also decide to adopt the same structure.
The UPS will be implemented from April 1, 2025 and will provide benefits including an assured pension equal to 50 per cent of the average basic salary received in the last 12 months before retirement. Employees must have a minimum of 25 years of service to be eligible for this, while for employees with lesser service period, the pension amount will be proportionate if they have served for at least 10 years.
