Deadline Extended for Unified Pension Scheme

DEADLINE EXTENDED FOR UNIFIED PENSION SCHEME OPTION

Why in the News?

  • Deadline extended: Finance Ministry has extended the option deadline under Unified Pension Scheme (UPS) till September 30, 2025.
  • Stakeholder requests: Extension followed multiple representations seeking more time from various stakeholders.
  • Eligibility: Applies to Central government employees, retirees, and spouses of deceased retirees.

Deadline Extended for Unified Pension Scheme

Key Features of Unified Pension Scheme

  • Target group: Applicable to 23 lakh Central government employees under National Pension System (NPS).
  • Introduced by: Union Cabinet, chaired by Prime Minister Modi, approved UPS on August 24, 2024.
  • Contribution-based: Employees contribute 10% of salary + DA; government contributes 5%.
  • Payout dependency: Final pension depends on market returns from corpus invested mainly in government debt.

NATIONAL PENSION SYSTEM (NPS)

●     Launched: NPS was implemented on January 1, 2004 for new government recruits.

●     Voluntary scheme: Now open to all citizens, including private sector employees.

●     Regulated by: Managed by the Pension Fund Regulatory and Development Authority (PFRDA).

●     Market-linked: Returns depend on market performance; offers multiple fund choices.

●     Tax benefits: Contributions eligible for deductions under Section 80CCD of Income Tax Act.