Unified Pension Scheme: Government Expected to Notify Rules by October 15, 2024
UPS is being implemented by the Central Government, benefitting 23 lakh central government employees. (Image for representation: digihunt)
The UPS will officially take effect from April 1, 2025. For those retiring under the NPS until March 31, 2025, pension benefits and arrears will be applicable.
The rollout of the Unified Pension Scheme (UPS) is reportedly on track for an official notification by October 15, as the government fast-tracks efforts for a planned launch on April 1, 2025.
According to a report by The Economic Times, efforts to finalise the UPS rules are being overseen by Cabinet Secretary TV Somanathan, who is heading a cross-departmental task force.
Regular consultations with key ministries are underway to ensure a seamless transition to the new pension scheme. Somanathan was also instrumental in the earlier review of the National Pension System (NPS), which led to this proposed shift to UPS.
The Department of Expenditure is leading the drafting and development of the UPS, while other departments play crucial supporting roles. The Department of Personnel and Training will be responsible for gauging the preferences of current employees, who will have the option to either stay with the NPS or move to the UPS. This decision process is scheduled to be completed before the April 2025 rollout.
Key departments like the Department of Pension and Pensioners’ Welfare are finalising the specifics of the scheme. Meanwhile, the Department of Administrative Reforms is working on revising service rules, and the Pension Fund Regulatory and Development Authority (PFRDA) is preparing the investment framework for the pension funds. Additionally, the National Securities Depository Ltd (NSDL) is evaluating the technical requirements for UPS implementation.
The UPS will officially take effect from April 1, 2025. For those retiring under the NPS until March 31, 2025, pension benefits and arrears will be applicable.
The Union Cabinet’s decision on August 24 has already given a major boost to around 23 lakh central government employees, promising a guaranteed pension of 50% of their last salary to those who joined after January 1, 2004, under the NPS.
Unified Pension Scheme vs National Pension Scheme
With the addition of all these features, it marks the transformation of the NPS, which promised pensions based on the contributions made by employees and the government.
NPS has been implemented for all government employees except those in the armed forces joining the central government on or after January 1, 2004.
Most state/Union Territory governments have also notified NPS of their new employees.
