Unified Pension Scheme: The Finance Ministry has notified the Unified Pension Scheme (UPS), which guarantees retirement benefits for central government employees covered under the National Pension System (NPS). The UPS will be implemented from April 1, 2025.
The newly announced scheme includes significant provisions for central government employees who have long been demanding the restoration of the Old Pension Scheme (OPS), which was discontinued by the Centre two decades ago. The OPS, however, has been reinstated by some states following persistent demands from labour unions and employee representative bodies.
The ministry announced on Saturday that UPS would be an option under the NPS for central government employees. The scheme will apply to central government employees already part of the National Pension System and choose to opt for this new scheme.
Although the Pension Fund Regulatory and Development Authority (PFRDA) is expected to release further rules to implement the UPS, the notification has some surprising elements that might need some clarifications at some point of time before the scheme gets implemented on April 1, 2025.
Also read: Central govt employees attention! Unified Pension Scheme notified – Key details you must know
Voluntary retirement after 25 years: Assured payouts to begin at official retirement age
One of the provisions in the notification says that if a central government employee voluntarily retires after completing a minimum of 25 years of service, the assured payout will begin from the date when the individual would have naturally retired, had he or she continued to work until the official age of superannuation.
According to the notification, “…in cases of voluntary retirement after a minimum 25 years of qualifying service, assured payout will commence from the date on which the employee would have superannuated, if he had continued in service.”
In simpler terms, if an employee chooses to retire early (after 25 years of service), he won’t immediately start receiving the assured pension payout. Instead, the payouts will only commence when they reach the age he would have retired at, had he stayed in service.
Is minimum service requirement for voluntary retirement being increased to 25 years?
A key question arising with this new scheme is whether the minimum qualifying service required for voluntary retirement from central government service is being increased to 25 years,
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