The central government has taken an important decision for those employees who are working under the new pension scheme (NPS) and have chosen the option of Unified Pension Scheme (UPS). The Department of Pension and Pensioners Welfare has recently set new conditions regarding voluntary retirement (VRS) and assured pension payment.
25 years required for complete pension
Now the central government employees who opt for UPS can take advantage of VRS after completing 20 years of service. But if an employee retires before 25 years, he will not get a complete sure monthly pension. In such a situation, the employee will be given proportional pension according to the years of service done by him.
In easy language, if you have done 20 years of job and have taken VRS, then the monthly pension you get will not be fulfilled, but will be fixed in the ratio of 20/25. That is, the monthly payment will be reduced according to the number of years you have served.
How will the pension payment formula decide?
If someone has worked for 20 years, then he will get sure monthly payment (20/25) × will be the amount of full pension. This payment will start from the day when that employee will retire from service. The government has made it clear that even after taking VRS, employees will get the rest of the retirement benefits. These include a lump sum withdrawal of 60% amount from the Personal Pension Fund, a lump sum bonus, retirement gratuity, leave refraction and benefits of CGEGIS scheme on the basis of base salary and dearness allowance. All these benefits will be paid at the time of retirement.
What will be found on death after VRS?
If an employee has taken VRS and dies before the full pension starts, the government will give family pension to his legally married spouse. This family payment will start from the day the employee died.
Why are these changes important?
Till now many employees were confused that what will be the status of VRS on choosing UPS under NPS. These new rules now clearly state that VRS is possible after 20 years of service, but to get full pension, it is necessary to do 25 years job.