Unified Pension: 50% Salary For Govt Employees?
The Centre has introduced the Unified Pension Scheme (UPS) under the National Pension Scheme (NPS), offering government employees an option for retirement. This scheme responds to the long-standing demand for the old pension system, which provided 50% of an employee’s last salary as pension. But will all employees receive this 50%?
Under the UPS, full 50% pension is possible, but there are conditions. Employees must meet a formula for the assured payout:
Assured payout = (P/2) x (Q/300) x (IC/BC)
Here, P is the average of the last 12 months’ basic pay, Q is months in service (max 300), IC is the individual corpus, and BC is the benchmark corpus. Only those with certain service lengths and retirement corpus requirements will qualify for the full 50%.
Key conditions for 50% pension:
- Average salary for the last 12 months equals the last drawn salary.
- Minimum 300 months of service.
- Retirement corpus matches the benchmark corpus.
Employees who voluntarily retire after 25 years of service can start receiving their pension after the age of 60, the official retirement age.
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