Unified Pension Scheme to put additional burden of ₹6,250 cr on exchequer: Vaishnaw

Unified Pension Scheme (UPS), which is going to provide assured pension to 23 lakh eligible central government employees, will put an additional burden of Rs 6,250 crore on the exchequer per year.

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UPS, effective from April 1, 2025 envisages government contribution rising from current level of 14 per cent to 18.5 per cent. This 4.5 per cent increase in government contribution is estimated to cost Rs 6,250 crore to the government, Union Minister Ashwini Vaishnaw has said.

Although the government is increasing its contribution under UPS, employees' contribution remains unchanged at 10 per cent of the basic salary.

In addition, there will be an arrear of Rs 800 crore that has to be paid under the National Pension System (NPS) to employees retiring before March 31, 2025. If these retirees opt for UPS, they will receive the arrears.