The Unified Pension Scheme (UPS) is set to roll out by April 1, 2025, and is expected to benefit a total of 23 lakh central government employees. Among those who will see significant advantages from this new scheme are over 1.36 lakh employees of the Central Railways (CR) and Western Railway (WR), according to officials.
Ensuring Pension Security for Railway Employees
The Narendra Modi-led government recently approved the Unified Pension Scheme (UPS), offering pension security for employees who joined after January 1, 2024. Those currently under the National Pension Scheme (NPS) who choose to switch to the new scheme will receive a guaranteed pension, which will amount to 50% of their average basic pay during their last 12 months of service before retirement. To qualify, employees must have completed at least 25 years of service.
Financial Impact on Zonal Railways
Ashok Kumar Mishra, Zonal Manager of Western Railway, shared that around 66,000 of their 96,000 employees—about 70%—are enrolled in the NPS and are expected to benefit from the UPS. The new scheme offers more pension security, as it is not linked to market performance like the NPS. However, it will also place additional financial strain on zonal railways, as the government’s or employer’s contribution has increased from 14% under the NPS to 18.5% under the UPS. On the Central Railways side, out of 96,039 employees, 70,778—or 73.69%—are currently subscribed to the NPS and stand to gain from the new pension scheme.
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