UPS Pension Calculations: Central government employees had National Pension System (NPS) as their default setting for the pension scheme. But they can now select Unified Pension Scheme (UPS) also. If they are already in NPS, they can also switch to UPS. Pensioners getting their payout under NPS can also switch to UPS. Unlike NPS, which is a market-linked pension scheme, UPS provides an assured pension on completion of at least 10 years of service. If you are a 28-year-old employee with Rs 35,000 as basic pay, what may be your monthly pension and lump sum amount at the retirement age of 60 years in UPS? See our estimates to know-
UPS investment pattern
In UPS, account holders can pick equity and debt investment schemes like they can in NPS.
They can contribute till the age of 60, at which stage, they are eligible to get their pension.
Along with that, they also get a lump sum amount.
UPS contribution- employee share, government share
The employee contributes 10 per cent of their basic pay and DA.
The government also contributes 18.5 per cent of the employee’s basic pay and DA to their account.
The government’s 8.5 per cent contribution from this goes to a pool corpus to support assured payouts.
Assured pension under UPS
The minimum pension that every employee will get on completion of at least 10 years of service will be Rs 10,000.
The maximum pension can be 50 per cent of the 12-month average basic pay immediately prior to superannuation.
If service years are between 10 and 25, the pension will be given on a proportionate basis.
Calculations for pension (conditions)
- Employee age: 28
- Basic pay and DA: 35,000
- Retirement age- 60
- Annual salary growth- 5 per cent
- Annual DA growth: 4 per cent
- Expected return- 11 per cent
- Annuity return- 6.5 per cent
- Life expectancy for self- 80 years
- Life expectancy for surviving spouse- 80 years
Calculation results (when lump sum withdrawal at retirement is 60%)
- Estimated monthly pension = Rs 1,39,172+dearness relief
- Lump sum payout at superannuation = Rs 50,29,335
- Final withdrawal payout at superannuation = Rs 5,11,58,651
- Total monthly payouts to subscribers in retirement phase = Rs 4,92,11,361
- Aggregate expected benefits to be received by the subscriber = Rs 10,53,99,346
Calculation results (when lump sum withdrawal at retirement is 0)
- Estimated monthly pension = Rs 3,47,931+dearness relief
- Lump sum payout at superannuation = Rs 50,29,335
- Total monthly payouts to subscribers in retirement phase = Rs 12,30,28,402
- Aggregate expected benefits to be received by the subscriber = Rs 12,80,57,737
(Disclaimer: These are estimates. Actual calculations may vary.)