Unified Pension Scheme: A New Hope for Retirement Security

The Unified Pension Scheme, offering a 50% assured pension on the average basic pay, has been introduced under NPS for central government employees. The scheme, effective from April 1, aims to enhance pension coverage and fiscal sustainability, addressing gaps in India's pension savings, which are lower than global standards.

The Financial Services Secretary, M Nagaraju, expressed optimism about the Unified Pension Scheme (UPS) on Thursday, highlighting its potential to extend pension security to various stakeholders. The scheme guarantees a pension of 50% of the average basic pay over the last 12 months.

Nagaraju noted the New Pension System (NPS) has become a vital retirement savings instrument in India, with its escalating assets under management and expanding subscriber base signifying public trust in the program.

The government has rolled out the UPS for central government staff as of April 1. This system not only promises a fixed payout but also ensures inflation adjustment, addressing the larger need for robust pension coverage, especially for gig workers and the informal sector.

(With inputs from agencies.)