Government approves unified pension plan for public employees: everything you need to know

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved the Unified Plan Pension system (UPS), which aims to provide assured pensions, family pensions and assured minimum pensions to government employees.

Under the new plan, employees would receive a guaranteed pension equivalent to 50 per cent of the average basic salary earned during the last 12 months preceding retirement for a minimum of 25 years of service. And if the employee in question has worked for less than 25 years, but has completed 10 years, then the pension would be derived proportionally.

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In addition, in the event of the death of the retired employee, his family will be eligible for a guaranteed family pension equivalent to 60 percent of the pension the employee was receiving immediately before his death. The new plan also guarantees a minimum pension of ₹10,000 per month as retirement after a minimum of 10 years of service.

Addressing the media on the Cabinet decisions, Union Information and Broadcasting Minister Ashwini Vaishnaw said the pension would be based on inflation indexation.

In addition, the employee will receive a lump sum payment at the time of retirement, in addition to the gratuity. It would be one-tenth of the monthly salary in effect at the date of retirement for every six months of service completed. This payment will not reduce the amount of the assured pension, according to a presentation shown by the minister at the press conference.

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Moreover, the government has increased its share contribution under the new scheme to 18.5 per cent, while the contribution of employees will remain the same. Replying to a media query, current finance secretary TV Somanathan, who has been appointed as the next cabinet secretary, said that the new scheme is expected to be more beneficial for employees compared to the current scheme.

Among other decisions, the cabinet also approved the proposal ‘BioE3 Policy (Biotechnology for the Economy, Environment and Employment) for the Promotion of High-Performance Biomanufacturing’.

The new Department of Biotechnology policy would include innovation-driven support for research and development (R&D) and entrepreneurship across all thematic sectors.

“This will accelerate technology development and commercialization through the establishment of Biomanufacturing and Bio-AI and Biofoundry hubs. Besides prioritizing green growth regenerative bioeconomy models, this policy will facilitate expansion of India’s skilled workforce and lead to increased job creation,” an official statement said.

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He noted that the policy would strengthen government initiatives such as the “Net Zero” carbon economy and “Green Lifestyle”.

In addition, the cabinet also approved the continuation of the three schemes of the Department of Science and Technology and merged them into a unified central sector scheme called ‘Vigyan Dhara’. The scheme, with an outlay of ₹10,579.84 crore would include institutional and human capacity building in science and technology (S&T), research and development and innovation, technology development and deployment.

“The main objective of the ‘Vigyan Dhara’ programme is to promote scientific and technological capacity building, research, innovation and technological development, with a view to strengthening the scientific, technological and innovation ecosystem in the country. The implementation of the programme will strengthen the scientific and technological infrastructure of the country by fostering well-equipped research and development laboratories in academic institutions,” said another statement.