25/01/2025
In a Gazette notification issued on January 24, it stated that the
central Government has decided to introduce Unified Pension Scheme, as
an option under the National Pension System for the employees of the
central government who covered under the NPS.
(i) Assured Payout shall be available only in the following cases, namely: -
(a) in case of an employee superannuating after qualifying service of ten years, from the date of superannuation;
(b)
in case of the Government retiring an employee under the provisions of
FR 56 (j) (which is not a penalty under Central Civil Services
(Classification, Control and Appeal) Rules, 1965) from the date of such
retirement; and
(c) in case of voluntary retirement after a
minimum qualifying service period of 25 years, from the date such
employee would have superannuated, if the service period had continued
to superannuation.
(ii) Assured Payout shall not be available in
case of removal or dismissal from service or resignation of the employee. In such cases, the Unified Pension Scheme option shall not
apply.
Benefits under the Scheme
(iii) Subject to other conditions stated in this notification, Assured Payout under the scheme shall be as follows, namely: -
(a)
the rate of full assured payout will be @50% of twelve monthly average
basic pay, immediately prior to superannuation. Full assured payout is
payable after a minimum 25 years of qualifying service:
(b) in case of lesser qualifying service period, proportionate payout would be admissible;
(c)
a minimum guaranteed payout of Rs. 10,000 per month shall be assured in
case superannuation is after ten years or more of qualifying service;
and
(d)
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.
(iv)
In case of death of the payout holder after superannuation, family
payout @60% of the payout admissible to the payout holder, immediately
before his demise, will be assured to the legally wedded spouse (spouse
legally wedded as on the date of superannuation or on the date of
voluntary retirement or retirement under FR 56(j), as may be
applicable).
(v) Dearness Relief will be available on the assured
payout and family payout, as the case may be. The Dearness Relief will
be worked out in the same manner as Dearness Allowance applicable to
serving employees. Dearness Relief will be payable only when payout
commences.
(vi)
A lump sum payment will be allowed on superannuation @10% of monthly
emoluments (basic pay + Dearness Allowance) for every completed six
months of qualifying service. This lump sum payment will not affect the
quantum of assured payout.
(vii)The corpus under the Unified Pension Scheme option will comprise of two funds, namely:-
(a) An individual corpus with employee contribution and matching Central Government contribution; and
(b) A pool corpus with additional Central Government contribution.
(viii)The
contribution of employees will be 10% of (basic pay + Dearness
Allowance). The matching Central Government contribution will also be
10% of (basic pay + Dearness Allowance). Both will be credited to each
employee's individual corpus.
(ix)
Central Government shall provide an additional contribution of an
estimated 8.5% of (basic pay + Dearness Allowance) of all employees who
have chosen the Unified Pension Scheme option, to the pool corpus on an
aggregate basis. The additional contribution is for supporting assured
payouts under the Unified Pension Scheme option.
(x) The employee
can exercise investment choices for the individual corpus alone. Such
investment choices shall be regulated by the Pension Fund Regulatory and
Development Authority. A 'default pattern of investment may be defined
by Pension Fund Regulatory and Development Authority from time to time.
If an employee does not exercise an investment choice on individual
corpus, the 'default pattern' of investment will apply.
(xi) The
investment decisions for the pool corpus built through the additional
Central Government contribution will solely rest with Central
Government.
(xii)
In respect of employees who have retired before the date of operation
of Unified Pension Scheme and who opt for the Unified Pension Scheme
option, Pension Fund Regulatory and Development Authority will determine
the mechanism for making available the top-up amount.
Explanation:
For the purpose of this notification basic pay includes non-practicing
allowance granted to medical officer in lieu of private practice.
3.
The existing Central Government Employees under National Pension
System, on the effective date of operationalisation of the Unified
Pension Scheme option, as well as the future employees of Central
Government can choose to either take the Unified Pension Scheme option
under the National Pension System or continue with the National Pension
System without the Unified Pension Scheme option. In case an employee
chooses the Unified Pension Scheme option, all its stipulations and
conditions shall be deemed to have been opted for and such option once
exercised, shall be final.
4. Once an employee covered under
National Pension System, who is in service on the effective date of
operationalisation of the Unified Pension Scheme option, exercises the
Unified Pension Scheme option, the outstanding National Pension System
corpus in the employees Permanent Retirement Account Number shall be
transferred to the employee's individual corpus under the Unified
Pension Scheme.
5. For each employee covered under National
Pension System who has exercised the Unified Pension Scheme option, a
'benchmark corpus' value shall be computed, in such manner as may be
determined by the Pension Fund Regulatory and Development Authority,
with the following assumptions, namely: -
(i) regular receipt of applicable contributions for both the employees and the employer for each month of qualifying service;
(ii)
in case of missing contributions, an appropriate value, to be
determined by the Pension Fund Regulatory and Development Authority,
shall be assigned; and
(iii) investment of such contributions is
made as per the 'default pattern of investment, as defined by the
Pension Fund Regulatory and Development Authority.
6. The value or
units in the individual corpus with investment choices of the employee
shall be informed to such employee on a periodic basis. Alongside, the
value or units of the benchmark corpus corresponding to the employee,
computed as per para 5 above will also be informed to the employee.
7.
At superannuation or retirement, the qualifying service of the employee
under the Unified Pension Scheme option, will be determined by the Head
of Office, where he is employed.
8. At superannuation or
retirement, the employee under Unified Pension Scheme shall authorise
transfer of the value or units in the individual corpus to the pool
corpus, equivalent to the value or units of the benchmark corpus for
authorisation of Assured Payout. In case the value or units of
individual corpus is less than value or units of the benchmark corpus,
the employee will have an option to arrange for additional contribution
to meet this gap. In case the value or units of individual corpus is
more than the value or units of the benchmark corpus, the employee shall
authorise transfer of value or units equivalent to the benchmark corpus
and the balance amount in the individual corpus will be credited to the
employee.
9.
In case the values or units transferred by the employee from the
individual corpus to the pool corpus, is less than the value or units of
the benchmark corpus, payout proportionate to the assured payout shall
be authorised.
10. The Unified Pension Scheme, being a 'fund-based
pension system, relies on the regular and timely accumulation and
investment of applicable contributions (from both the employee and the
employer) for Assured Payout to the employees.
11. For the sake of
clarity, it is made clear that any employee who has exercised the
Unified Pension Scheme option under National Pension System under this
notification, shall not be entitled for and cannot claim, any other
policy concession, policy change, financial benefit, any parity with
subsequent retirees etc. later including post- retirement.
12. The
provisions of Unified Pension Scheme will also be applicable, mutatis
mutandis to past retirees of National Pension System, who have
superannuated before the date of operationalising of Unified Pension
Scheme. Such superannuated employees will be paid arrears for the past
period along with interest as per Public Provident Fund rates. The
monthly top-up amount for such superannuated employees, to be determined
by the Pension Fund Regulatory and Development Authority, will be paid
after adjusting the withdrawals made by, and annuities paid to, them.
13.
The provisions regarding assured payout under the Unified Pension
Scheme option for employees facing disciplinary proceedings at the time
of superannuation or where disciplinary proceedings are contemplated
post- retirement, shall be separately notified.
14. Illustrative
examples as to working of payouts of Unified Pension Scheme under
different scenarios are given in the Annexure.
15. Pension Fund Regulatory and Development Authority may issue regulations for operationalising Unified Pension Scheme.
16. The effective date for operationalisation of the Unified Pension Scheme shall be 1ª April, 2025.