What is the Unified Pension Scheme?
The Unified Pension Scheme (UPS), introduced by the Indian government on August 24, 2024, and effective from April 1, 2025, is designed to provide a secure and predictable pension for central government employees. Combining features of the Old Pension Scheme (OPS) and the National Pension System (NPS), it offers:
- A guaranteed pension of 50% of the average basic pay over the last 12 months for 25+ years of service.
- A minimum pension of ₹10,000 per month for 10+ years of service.
- A family pension of 60% of the retiree’s pension.
- A lump sum payment of 1/10th of monthly emoluments per six months of service.
- Inflation-indexed pensions via Dearness Relief (DR).
Employees contribute 10% of their basic pay plus Dearness Allowance (DA), while the government contributes 18.5%.
How Does This Calculator Work?
This calculator estimates your UPS benefits based on:
- Average Monthly Basic Pay: The average basic salary over the last 12 months before retirement.
- Dearness Allowance (DA): The percentage of DA applied to the basic pay at retirement.
- Years of Service: The total number of years served, determining pension eligibility and amount.
It calculates the monthly pension, family pension, and lump sum payment, providing a clear picture of your retirement benefits. Note that results are indicative and subject to actual service records and government policies.
UPS vs. NPS
Unlike the market-linked NPS, the UPS guarantees a fixed pension, making it more predictable. Key differences include:
- Pension Amount: UPS offers 50% of average basic pay (25+ years) or proportional (10–24 years), while NPS depends on investment returns.
- Government Contribution: UPS has a higher government contribution (18.5% vs. 14% in NPS).
- Switching Option: NPS subscribers can switch to UPS by September 30, 2025, but the decision is irreversible.
Use our NPS Calculator to compare potential outcomes.
Explore More Related Tools
Plan your financial future comprehensively with these calculators:
- NPS Calculator (Standalone): For a more detailed analysis of your NPS investment.
- Retirement Calculator: Plan your overall retirement corpus needs.
- Gratuity Calculator: Another key retirement benefit for employees in India.
- PPF Calculator: Explore another popular government-backed savings scheme.
- Inflation Calculator: See how the value of your pension will change over time.
- Income Tax Calculator: Understand the tax implications of your salary and pension.
- Compound Interest Calculator: Visualize the growth of your NPS corpus.
- Salary Calculator: Analyze your current take-home pay and deductions.
- SIP Calculator: Compare NPS with another popular investment method.
- Age Calculator: Easily determine your remaining years of service.
Frequently Asked Questions (FAQ)
Who is eligible for the Unified Pension Scheme?
Central government employees with at least 10 years of service qualify for a minimum pension of ₹10,000 per month. Those with 25+ years receive 50% of their average basic pay over the last 12 months.
Can NPS subscribers switch to UPS?
Yes, existing NPS subscribers can opt for UPS by September 30, 2025. However, once chosen, the decision is final.
What is the family pension under UPS?
The family pension is 60% of the pension amount the employee was receiving immediately before their demise, ensuring financial security for the spouse.