Today's Edition
NEW DELHI (Reuters)
The Indian government approved on Saturday a pension scheme which will guarantee federal government employees 50% of their base salary as a pension, moving away from a current scheme where the payout is linked to market returns.
The Unified Pension Scheme (UPS) for India's over two million federal government employees is set to be implemented from April 1, 2025, said Ashwini Vaishnaw, a cabinet minister.
He said it will ensure 50% of the base salary drawn during the last 12 months before retirement as a pension for government employees who complete a minimum of 25 years of service.
The current National Pension Scheme requires employees to contribute 10% of their base salary and the government 14%. The eventual payout depends on the market returns on that corpus, which is mostly invested in federal debt.
Trade unions and opposition parties have been advocating for a guaranteed minimum pension for government employees, and it was a major political issue in the recent general elections.
The financial implication of the UPS on the government exchequer is expected to be about 62.5 billion rupees ($745 million) in the fiscal year 2024-25, with the annual cost varying each year depending on the number of retiring employees, the minister said.
