UPS Pension Calculations: Central government employees can now opt for Unified Pension Scheme (UPS) apart from National Pension System (NPS). Employees who are already getting their pension under NPS can also move to UPS. Those who are joining the central government service can pick UPS instead of NPS. While UPS offers them an assured pension and lump sum amount, in NPS, both payouts depend on the NPS account holder’s investment return.
Know how the UPS pension and lump sum are calculated and what the projected pension will be for 26-year-old employees who are starting their job at Rs 29,300, Rs 35,400 or Rs 44,900 basic salary!
How UPS pension is calculated
UPS offers a minimum Rs 10,000 assured pension on the completion of at least 10 years of service.
The maximum pension is 50 per cent of the last 12-month average basic pay immediately prior to retirement.
If service years are in between 10 and 25, the pension amount will be proportionate to them.
Dearness relief for UPS pensioners
Apart from the basic pension, pensioners will also get dearness relief (DR), an amount given to pensioners to adjust their payout to inflation.
So the pension amount will keep increasing as and when DR rises.
Lump sum amount for UPS pensioners
Pensioners also get a fixed lump sum amount at retirement.
A lump sum payment will be allowed on superannuation at 10 per cent of monthly emoluments (basic pay + dearness allowance) for every completed six months of qualifying service.
Lump sum amount = (1/10XTotal emuluments) X L
(Where L =number of six-monthly completed years of service based on the number of months for contribution to the individual’s pension corpus)
Calculations for story
We will calculate the estimated pension amount for 26-year-old employees who are joining their central government service at a basic salary of Rs 29,300, Rs 35,400 or Rs 44,900.
Conditions for story
Basic salary – Rs 29,300, Rs 35,400, Rs 44,900
Current employee age- 26 years
Retirement age- 60 years
Service years- 34 years
Expected salary hike per year- 5 per cent
Estimated pension for 26-year-old employee with Rs 29,300 starting basic pay
First, look at the salary they will have by the end of their career with a 5 per cent pay rise every year.
We are also assuming that Rs 1,53,923.10 will be their average last 12-month basic average salary.
Estimated pension amount= Rs 1,53,923.10/2= Rs 76,961.55
| Age | Service years | Basic salary every year |
| 26 | 0 | ₹ 29,300.00 |
| 27 | 1 | ₹ 30,765.00 |
| 28 | 2 | ₹ 32,303.25 |
| 29 | 3 | ₹ 33,918.41 |
| 30 | 4 | ₹ 35,614.33 |
| 31 | 5 | ₹ 37,395.05 |
| 32 | 6 | ₹ 39,264.80 |
| 33 | 7 | ₹ 41,228.04 |
| 34 | 8 | ₹ 43,289.44 |
| 35 | 9 | ₹ 45,453.92 |
| 36 | 10 | ₹ 47,726.61 |
| 37 | 11 | ₹ 50,112.94 |
| 38 | 12 | ₹ 52,618.59 |
| 39 | 13 | ₹ 55,249.52 |
| 40 | 14 | ₹ 58,012.00 |
| 41 | 15 | ₹ 60,912.60 |
| 42 | 16 | ₹ 63,958.23 |
| 43 | 17 | ₹ 67,156.14 |
| 44 | 18 | ₹ 70,513.94 |
| 45 | 19 | ₹ 74,039.64 |
| 46 | 20 | ₹ 77,741.62 |
| 47 | 21 | ₹ 81,628.70 |
| 48 | 22 | ₹ 85,710.14 |
| 49 | 23 | ₹ 89,995.65 |
| 50 | 24 | ₹ 94,495.43 |
| 51 | 25 | ₹ 99,220.20 |
| 52 | 26 | ₹ 1,04,181.21 |
| 53 | 27 | ₹ 1,09,390.27 |
| 54 | 28 | ₹ 1,14,859.78 |
| 55 | 29 | ₹ 1,20,602.77 |
| 56 | 30 | ₹ 1,26,632.91 |
| 57 | 31 | ₹ 1,32,964.56 |
| 58 | 32 | ₹ 1,39,612.79 |
| 59 | 33 | ₹ 1,46,593.42 |
| 60 | 34 | ₹ 1,53,923.10 |
| Estimated pension | ₹ 76,961.55 | |
Estimated pension for 26-year-old employee with Rs 35,400 starting basic pay
Estimated pension amount= Rs 1,85,968.52/2= Rs 92,984.26
| Age | Service years | Basic salary every year |
| 26 | 0 | ₹ 35,400.00 |
| 27 | 1 | ₹ 37,170.00 |
| 28 | 2 | ₹ 39,028.50 |
| 29 | 3 | ₹ 40,979.93 |
| 30 | 4 | ₹ 43,028.92 |
| 31 | 5 | ₹ 45,180.37 |
| 32 | 6 | ₹ 47,439.39 |
| 33 | 7 | ₹ 49,811.35 |
| 34 | 8 | ₹ 52,301.92 |
| 35 | 9 | ₹ 54,917.02 |
| 36 | 10 | ₹ 57,662.87 |
| 37 | 11 | ₹ 60,546.01 |
| 38 | 12 | ₹ 63,573.31 |
| 39 | 13 | ₹ 66,751.98 |
| 40 | 14 | ₹ 70,089.58 |
| 41 | 15 | ₹ 73,594.06 |
| 42 | 16 | ₹ 77,273.76 |
| 43 | 17 | ₹ 81,137.45 |
| 44 | 18 | ₹ 85,194.32 |
| 45 | 19 | ₹ 89,454.04 |
| 46 | 20 | ₹ 93,926.74 |
| 47 | 21 | ₹ 98,623.08 |
| 48 | 22 | ₹ 1,03,554.23 |
| 49 | 23 | ₹ 1,08,731.94 |
| 50 | 24 | ₹ 1,14,168.54 |
| 51 | 25 | ₹ 1,19,876.96 |
| 52 | 26 | ₹ 1,25,870.81 |
| 53 | 27 | ₹ 1,32,164.35 |
| 54 | 28 | ₹ 1,38,772.57 |
| 55 | 29 | ₹ 1,45,711.20 |
| 56 | 30 | ₹ 1,52,996.76 |
| 57 | 31 | ₹ 1,60,646.60 |
| 58 | 32 | ₹ 1,68,678.93 |
| 59 | 33 | ₹ 1,77,112.87 |
| 60 | 34 | ₹ 1,85,968.52 |
| Estimated pension | ₹ 92,984.26 | |
Estimated pension for 26-year-old employee with Rs 44,900 starting basic pay
Estimated pension amount= Rs 2,35,875.32/2= Rs 1,17,937.66
| Age | Service years | Basic salary every year |
| 26 | 0 | ₹ 44,900.00 |
| 27 | 1 | ₹ 47,145.00 |
| 28 | 2 | ₹ 49,502.25 |
| 29 | 3 | ₹ 51,977.36 |
| 30 | 4 | ₹ 54,576.23 |
| 31 | 5 | ₹ 57,305.04 |
| 32 | 6 | ₹ 60,170.29 |
| 33 | 7 | ₹ 63,178.81 |
| 34 | 8 | ₹ 66,337.75 |
| 35 | 9 | ₹ 69,654.64 |
| 36 | 10 | ₹ 73,137.37 |
| 37 | 11 | ₹ 76,794.24 |
| 38 | 12 | ₹ 80,633.95 |
| 39 | 13 | ₹ 84,665.65 |
| 40 | 14 | ₹ 88,898.93 |
| 41 | 15 | ₹ 93,343.88 |
| 42 | 16 | ₹ 98,011.07 |
| 43 | 17 | ₹ 1,02,911.62 |
| 44 | 18 | ₹ 1,08,057.20 |
| 45 | 19 | ₹ 1,13,460.06 |
| 46 | 20 | ₹ 1,19,133.07 |
| 47 | 21 | ₹ 1,25,089.72 |
| 48 | 22 | ₹ 1,31,344.21 |
| 49 | 23 | ₹ 1,37,911.42 |
| 50 | 24 | ₹ 1,44,806.99 |
| 51 | 25 | ₹ 1,52,047.34 |
| 52 | 26 | ₹ 1,59,649.70 |
| 53 | 27 | ₹ 1,67,632.19 |
| 54 | 28 | ₹ 1,76,013.80 |
| 55 | 29 | ₹ 1,84,814.49 |
| 56 | 30 | ₹ 1,94,055.21 |
| 57 | 31 | ₹ 2,03,757.97 |
| 58 | 32 | ₹ 2,13,945.87 |
| 59 | 33 | ₹ 2,24,643.17 |
| 60 | 34 | ₹ 2,35,875.32 |
| Estimated pension | ₹ 1,17,937.66 | |
(Disclaimer: These are projections. Actual calculations may vary.)