Unified Pension Scheme (UPS) Calculation: Average basic pay Rs 1,00,000 & pensionable service 25 years? How much total pension you will get

UPS Monthly Pension Calculations: Unified Pension Scheme (UPS) was launched in October 2024 and notified in January 2025.

The scheme is a mix of Old Pension Scheme (OPS) and New Pension System (NPS).

It will provide an assured pension like OPS, while the government employee can invest their amount in equity like as they do in NPS.

UPS offers a minimum assured pension of Rs 10,000 on the completion of 10 years of service.

The pension will be 50 per cent of the 12-month average basic pay prior to superannuation of an employee with at least 25 years of pensionable service.

Know various aspects of UPS and what will be the minimum assured monthly pension for an employee with an average 12-month basic pay of Rs 1,00,000 and pensionable service of 25 years.

Will UPS replace NPS? 

NPS was launched in 2004, but UPS won't replace it.

Both schemes will run side by side.

Government employees will be voluntarily able to switch from NPS to UPS, but such a shift will be possible only once.

Employee/employer contribution in UPS

The central government employee contribution to their UPS account will be 10 per cent, while the employer contribution will be 18.5 per cent.

Of the government's 18.5 per cent contribution, 8.5 per cent will go to the pool corpus on an aggregate basis.

The additional contribution will support the employee's assured payouts under the UPS option.

While the employee's and the government's 10 per cent contribution each will be credited to the employee’s individual corpus, which will be invested in an equity-linked programme.

What is concept of minimum assured pension?

Since the employee's and government's 10 per cent contribution will be invested in the market-linked programme.

In that condition, there are chances of a lower pension than the assured limit for an employee if the market is down at the time of the employee's retirement.

If that happens, the government will compensate the rest of the amount to assure the minimum pension to the employee.

What if pensionable service is less than 25 years?

The employee will not get a full 50 per cent of the average basic pay of 12 months prior to superannuation.

It will be in proportion to the years of service.

E.g., if the service is 20 years, the minimum pension will be 40 per cent of average basic pay.

At 22 years of service, the minimum assured pension will be 44 per cent of the average basic pay. 

Can employee get more than 50% pension of basic pay? 

If their market-linked UPS investments perform well and the market is high at the time of an employee's retirement, they can get a higher pension than 50 per cent of their 12-month average basic pay.

Will UPS account holders get any other amount than basic pension?

They will also get dearness relief (DR) along with their basic pension.

The DR is calculated as per All India Consumer Price Index (Industrial Workers). 

Lump sum amount for UPS pension holder

At the time of retirement, the UPS account holder will also get a lump sum amount, which will be equal to 10 per cent of monthly emoluments (basic pay +dearness allowance) for every completed six months of qualifying service.

Lump sum amount = (1/10 of total emoluments)XL

(Where L is the number of six-monthly completed years of service based on the number of months for contribution to an individual’s pension corpus)

Can past retirees of NPS be allowed to opt for UPS?

They can join UPS even if they are taking a pension under NPS. However, in that case, their superannuation should be before the date of operationalising of UPS.

Minimum assured pension on Rs 1 lakh basic pay and 25 years of service

If the average basic salary of the last 12 months is Rs 1,00,000, pensionable service years are 25, and the DR rate is 53 per cent, the estimated total monthly pension will be Rs 76,500. The estimated lump sum amount they will get at retirement will be Rs 7,65,000. 

What will be family pension?

If the UPS pension holder dies, the family will get a 60 per cent amount of their pension, so in this case, the estimated monthly pension (including DR) will be Rs 45,900.

The estimated lump sum amount will remain the same at Rs 7,65,000.