Will Employees Be Eligible For Unified Pension Scheme In Case Of VRS? Here’s What Govt Says

New Delhi: In a remarkable move, the Union Cabinet on Saturday approved a new pension scheme for government employees called the Unified Pension Scheme (UPS), providing assured individual pension, family pension and assured minimum pension. The central government’s latest move to benefit government employees has been widely welcomed by the citizens. Meanwhile, with the announcement by the government, a few unanswered questions also surfaced related to the scheme and one of the questions is linked to the voluntary retirement of the employees.

The government officials clarified the confusion saying that in the case of voluntary retirement, government employees, who want to avail Unified Pension Scheme and planning to opt for VRS (Voluntary Retirement Scheme), should at least serve 25 years. 

Under the UPS, government employees will receive 50 per cent of their salary as a pension, based on the average basic pay drawn over the last 12 months prior to retirement, provided they have a minimum qualifying service of 25 years. The scheme also includes an assured family pension, where 60 percent of the employee’s pension can be immediately drawn by their family upon their demise. Additionally, a minimum pension of Rs 10,000 per month is assured for employees who retire after at least 10 years of service.

The salient features of the Unified Pension Scheme approved by the Union Cabinet chaired by Prime Minister Narendra Modi: 

• Assured pension: 50% of the average basic pay drawn over the last 12 months before superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for a lesser service period up to a minimum of 10 years of service.
• Assured family pension: @60% of pension of the employee immediately before her/his demise.
• Assured minimum pension: @10,000 per month on superannuation after a minimum of 10 years of service.
• Inflation indexation: on assured pension, on assured family pension and assured minimum pension
• Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) as in the case of service employees' lump sum payment at superannuation in addition to gratuity
• 1/10th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service this payment will not reduce the quantum of assured pension.