Haryana clears Unified Pension Scheme with 50% assured payout for govt staff

Indian Express

4 days ago

The Haryana Cabinet on Thursday approved the adoption of the Unified Pension Scheme (UPS) under the National Pension System (NPS), offering state government employees an assured monthly pension of 50% of their average basic pay at retirement — a major reform expected to benefit over 2 lakh employees appointed on or after January 1, 2006.
Cleared at a Cabinet meeting chaired by Chief Minister Nayab Singh Saini, the scheme will come into effect from August 1, 2025. Officials said the decision aligns with the central government's UPS notification under NPS and aims to provide financial security post-retirement to state employees.
Under the scheme, employees retiring after at least 25 years of service will be eligible for a pension equal to 50% of the average basic pay drawn in the final 12 months of service. A minimum assured pension of ₹10,000 per month will be extended to those with 10 or more years of qualifying service. In case of the pensioner's death, the family will receive 60% of the last drawn pension.
Dearness Relief (DR), calculated like the Dearness Allowance (DA) for serving staff, will apply to both assured and family pensions — but only after pension payouts begin.
Employees will also receive a lump sum at retirement: 10% of their monthly emoluments (Basic Pay plus DA) for every completed six months of service. This one-time payment will not affect their pension entitlement.
With the implementation of UPS, the state's contribution to employee pensions will rise from 14% to 18.5%, pushing the government's monthly expenditure to approximately ₹50 crore and annual costs to ₹600 crore.
The pension fund will be split into two components: an individual corpus and a pool corpus. The individual corpus will consist of the employee's 10% contribution matched by an equal 10% from the state, deposited into personal accounts. The pool corpus will be funded by an additional 8.5% contribution by the government and used to support the assured pension payouts.
While employees can choose how their individual corpus is invested, subject to Pension Fund Regulatory and Development Authority (PFRDA) rules, the investment of the pool corpus will be decided by the Haryana government. If no preference is indicated, the default investment pattern defined by PFRDA will apply.
For employees who retired before the scheme's implementation but opt in, the PFRDA will work out the mechanism for top-up payments.
All existing government employees under the NPS and future hires will be allowed to choose between continuing under NPS or switching to UPS. However, once an employee selects UPS, the choice will be binding.
A separate decision will be taken later regarding the extension of UPS to Boards, Corporations, Public Sector Undertakings (PSUs), and State Universities.
The Centre had cleared the UPS for central government employees in January this year, following the Union Finance Ministry's nod in August 2023. It applies to those who joined on or after January 1, 2004.
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