NEW DELHI: The Union Cabinet has approved the Unified Pension Scheme (UPS) for central employees to overcome protests over the withdrawal of the old pension scheme, which backfired including in Himachal Pradesh. The pension scheme will come into effect on April 1, 2025. State governments can also emulate this.

Information and Broadcasting Minister Ashwani Vaishnaw announced that 3 lakh central employees will benefit from the new pension scheme. 90 lakh employees will benefit if the state governments also implement the new pension scheme. Employees will be given the option to continue with the current National Pension Scheme (NPS) and UPS.

The new pension scheme is as follows:

• Benefit to those with minimum 25 years of service.
• Pension of 50% of last 12 months basic pay.
• 60% family pension
• Employee share 10% Government share 18.5% (currently 14%)​
• 10,000 rupees monthly pension for those with 10 years of service.
• Lapsum payment in addition to gratuity on retirement
• Those who are in NPS can also become members. The plan cannot be changed later.
• If you switch to UPS, you can pay additional installments at PPF interest rates.
• The expenditure for arrears will be Rs 800 crore. The annual cost increase will be around Rs 6,250 crore in the first year. The central government will be liable for this.