The calculator is designed to help users make informed decisions.
With a few inputs, it shows a side-by-side pension comparison under both schemes.
What is the Unified Pension Scheme?
The UPS is a new pension option for central government employees. It offers a guaranteed monthly pension along with a lump sum on retirement.
The Government of India recently notified the scheme, and it is now available as an alternative to NPS.
How UPS works?
- Employees contribute 10% of their basic salary + DA.
- The government contributes an equal amount.
- These contributions are invested either through default schemes or private pension fund managers (PFMs), as per the employee’s choice.
UPS promises a structured pension based on service tenure:
- 50% pension of the average basic salary (last 12 months) for employees with 25+ years of service.
- Proportionate pension for service between 10–25 years.
- A minimum guaranteed pension of ₹10,000 per month for those who complete at least 10 years of service.
Support for family
If a pensioner passes away, 60% of the pension is paid to the spouse. This ensures continued financial support for the family.
Pension withdrawals like SWP
When employees retire, pensions are paid out like a Systematic Withdrawal Plan (SWP) in mutual funds. If the pension corpus runs out before the pensioner or their spouse dies, the government steps in. Payments will then continue from a government-managed common pool.
Who can use it?
At present, UPS is available only to central government employees. State governments can choose whether or not to adopt it for their staff.
Why the calculator matters?
The UPS Calculator helps employees:
- Compare estimated pensions under NPS and UPS.
- Choose the plan that best fits their retirement needs.
- Understand long-term pension benefits in simple terms.
