Unified Pension Scheme: Last month, the Center announced the Unified Pension Scheme (UPS), a lifetime guaranteed retirement plan for central government employees. However, employees will be given the option to choose between the National Pension System (NPS) and UPS. Unlike NPS, UPS guarantees central government employees a fixed pension equivalent to 50% of their average monthly salary in the last 12 months before retirement.

Now let’s take a look at what the minimum looks like pension Payments under UPS may change when the 8th Pay Commission is implemented, which is expected to come into force from 1 January 2026. However, it is worth noting that no official approval has yet been received from the government regarding the 8th Pay Commission. The idea for the implementation is based on media reports suggesting that the new pay commission’s recommendations could come into force from January 2026. This speculation is in line with past trends, where the government typically implements new pay commission recommendations every 10 years to revise salaries. pensions for central government employees and retirees.

Before calculating pension under UPS, it is important to first understand the changes that will occur in the salaries and pensions of central government employees once the 8th Pay Commission comes into force. Salaries of government staff at different levels will be revised based on a certain eligibility factor. For example, 7. Salary CommissionA compliance factor of 2.57 was applied to salary revisions.

Also read: 8. Pay Commission: Will the minimum salary of central government employees be increased to Rs 51480? Check calculation

8. Possible compliance factor under the Salary Commission

As for the compliance factor expected under the 8th Pay Commission, various reports suggest that the government may agree on a factor of 1.92. However, according to a report by NDTV Profit, Shiv Gopal Mishra, Secretary (Staff Side), National Joint Council of Consultative Machinery (NC-JCM), is hopeful that the government will opt for a higher compliance factor of at least 2.86.

Minimum salary and pension expected under the 8th Salary Commission

If this adjustment factor of 2.86 is applied, the minimum basic salary of a government employee will increase from the current minimum salary of Rs 18,000 to Rs 51,480. Similarly, if the adjustment factor is set at 2.86, pensions will increase to Rs 25,740 compared to the current pension of Rs 9,000.

Scheduled to come into force on April 1, 2025, UPS guarantees a pension equivalent to 50% of the average salary earned in the last 12 months before retirement. Based on this, the likely minimum pension under UPS will be Rs 25,740 assuming the compliance factor is 2.86.

However, this pension amount depends on the assumption that the compliance factor will actually be determined as 2.86. If the adjustment factor changes, there will be a corresponding change in both the minimum salary and pension of central government employees once the 8th Pay Commission is implemented.

Also read: 8. Salary Commission Formation: ‘Appropriate time for announcement…government will take the decision’ – Key takeaways from Staff Side-government meeting

Other highlights of UPS coverage

UPS, like OPS, has a guaranteed retirement provision. UPS will also ensure that a minimum pension of Rs 10,000 is provided to a person retiring from a government job, provided the person completes 10 years of service. In case of death of the retiree, 60% of the fixed pension is paid to his/her spouse.

To be eligible for full pension under UPS, the employee must complete at least 25 years of service. If the employee provides less than 25 years of service, a pro-rata reduced pension will be provided.