The Unknown Benefits of the Unified Pension Scheme: A Professional Insight with CSS financial solutions
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The Unknown Benefits of the Unified Pension Scheme: A Professional Insight with CSS financial solutions

Updated: Jun 25



"Imagine retiring with the confidence of a stable, inflation-protected income. That's the promise of the Unified Pension Scheme, a landmark reform in India's pension system."


"Approved by the Union Cabinet on August 24, 2024, notified in 24th Jan 2025 & Implemented from 1'1 April 2025 the Unified Pension Scheme, or UPS, is a new initiative designed to provide financial security and stability for central government employees after retirement. It blends the best of the Old Pension Scheme and the National Pension System, offering assured pensions, family benefits, and inflation protection."


we'll explore the key features of the UPS, its eligibility criteria, benefits, Significant modifications from existing pension schemes. By the end, you'll understand which will be beneficial for you and you can make an informed descion in the timeframe"


Brief History of


OPS -PAYG -No Contributions Defined Benefit

NPS -Defined Contribution Undefined Benefit (Market linked)

UPS-Defined Contribution and Defined Benefit, based on Somanathan Committee Report 2023

The Key Objectives of UPS

• Ensure Assured Post Retirement Payouts-Guarantee & Inflation Indexation

• Establish a fund-based payout system

• Guaranteed Pension, Inflation Adjusted Benefits

• Family Payout

• Financial Security, Stability and Dignity

• Smooth Transition from NPS to UPS


Eligibility and Enrollments


Existing CG Employees within 3 months ends on June 30th, 2025, Form A2


New Employee within I month of joining post April I, 2025, Form A I default will be NPS


Retired Employees within 3 months


Surviving B2 Form


Spouse: B6 form


Contributions under UPS


Individual Corpus: 1O% Employee 10 % Employer (Basic+ DA) Investment Descion default or non-default


Pooled Corpus :8.5 % Employer (Additional Contribution from Govt) Investment descion government.


In UPS


IC consist of 10 % employee and 10% employer


Growth in Corpus based on return generated by FM


Investment Pattern of IC


Default: UTI, SB1 and LIC (25 % will be equity and rest in Gov and Corp) earlier it was 15% till 31st March 25



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Non-Default: any 10 Pension Fund Manager including (UTI SBI LIC) options 100% G

Moderate Life Cycle SO, conservative Life Cycle 25

Benchmark Corpus


BC is calculated value based on default pattern and is compared with employees IC under UPS

IF IC is higher than BC excess is paid at retirement

If IC is less than BC, the subscriber can replenish the shortfall or get a reduced payout


Best for an employee who wants confirmed pension opt for Default others can look at non-default.

PFM Can be changed yearly once


Can change Investment pattern twice a year


Computation of Benefits


Lumpsum Payout


1/10 of the last drawn basic +DA for every completed 6 months of service at the time of Super Annotation Assured Payout (less than 10 years no 10 -25 proportionate and 25 & above 5O% of the last 12 months basic) Assured Payout: (1/2 of P) X (Q /300) X (IC /BC)


P = Average Basic pay of the last 12 months


Q = Qualifying Service


IC= Individual Corpus


BC= Benchmark Corpus •


IF IC is higher than BC excess is paid at retirement •


If IC is less than BC, the subscriber can replenish the shortfall or get a reduced payout


Lumpsum Withdrawal (Up to 60 % you are eligible)


Admissible Payout= Assured payout* (l-FW%) FW = Final Withdrawal


Partial Withdrawal 3 times during the tenure for specific reasons


DR is applicable on the Admissible payout (applicable only after payout begins)


Assured Family Payout: 60 % of Admissible payout for legally wedded spouse


Types of payouts


Monthly (Admissible Payout & DR)


At time of Super Annuation


Lumpsum payout


If opting for withdrawal up to 60 % (That amount)


Surplus (if any)








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The Unknown Benefits of the Unified Pension Scheme: A Professional Insight with CSS financial solutions

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