Unified Pension Scheme: What will be the minimum pension of a central govt employee under UPS after 8th Pay Commission?
The Unified Pension Scheme (UPS) for central government employees is set to implement significant changes in pension structures, particularly with the upcoming 8th Pay Commission. Here are the key details regarding the minimum pension under the UPS after the 8th Pay Commission’s recommendations are expected to take effect on January 1, 2026.
Minimum Pension Under UPS
Guaranteed Minimum Pension: The UPS guarantees a minimum pension of Rs 10,000 per month for retirees who have completed at least 10 years of service at the time of retirement.
Pension Calculation: The pension amount will generally be equivalent to 50% of the average monthly salary drawn during the last 12 months prior to retirement. This calculation is contingent upon the employee having served a minimum of 25 years for full pension eligibility.
Impact of the 8th Pay Commission: The implementation of the 8th Pay Commission is anticipated to introduce a fitment factor that could significantly raise salaries and pensions. Current estimates suggest that if a fitment factor of 2.86 is applied, the minimum pension could increase to approximately Rs 25,740, up from the current pension of Rs 9,000.
Family Pension Provision: In cases where a pensioner passes away, their spouse will receive 60% of the pension amount that was being received prior to death.
Contingent Factors: It’s important to note that these figures are subject to change based on the final decisions made by the government regarding the fitment factor and other parameters following the 8th Pay Commission’s recommendations.
While the minimum guaranteed pension under the UPS will be Rs 10,000 for eligible employees, there is potential for this amount to rise significantly depending on salary adjustments from the 8th Pay Commission.
The Unified Pension Scheme (UPS), set to be implemented on April 1, 2025, guarantees a minimum pension for central government employees. Under this scheme, employees who have completed at least 10 years of service will receive a minimum pension of ₹10,000 per month upon retirement.
Impact of the 8th Pay Commission
With the anticipated implementation of the 8th Pay Commission on January 1, 2026, there are expectations for significant changes in pension amounts. The fitment factor, which is a multiplier used to calculate salary and pension increases, is projected to range between 1.92 and 2.86. If a fitment factor of 2.86 is adopted, the minimum pension could rise substantially.
Current Minimum Pension: ₹9,000
Projected Minimum Pension with Fitment Factor of 2.86: ₹25,740
This increase reflects a potential rise in the basic salary from ₹18,000 to approximately ₹51,480, thereby raising pensions accordingly.
Summary of UPS Features
Minimum Pension: ₹10,000 for those with at least 10 years of service.
Assured Pension: 50% of the average basic pay over the last 12 months prior to retirement for those with at least 25 years of service; proportionate for shorter service.
Family Pension: 60% of the employee’s pension will be provided to family members upon the employee’s death.
Inflation Indexation: Pensions will be adjusted based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) to account for inflation.
The UPS aims to provide greater financial security and predictability for government employees compared to previous schemes like the National Pension System (NPS).
