Central government employees now have a helpful tool at their disposal to plan their retirement better. The NPS Trust has launched the Unified Pension Scheme (UPS) Calculator on May 20. This online tool enables central government employees to estimate and compare pension benefits under both the National Pension System (NPS) and the UPS.
In a post on X (formerly Twitter), the Department of Financial Services (DFS) stated, “NPS Trust has launched the Unified Pension Scheme (UPS) Calculator. The calculator provides pension estimates to the subscribers under both NPS and UPS. This tool will assist subscribers in making informed choices while choosing the right pension plan.”
NPS Trust has launched the Unified Pension Scheme (UPS) Calculator. The calculator provides pension estimates to the subscribers under both NPS and UPS. This tool will assist subscribers in making informed choices while choosing the right pension plan. (1/2)
May 20, 2025This digital calculator provides an estimate of future pension earnings under both schemes. Requiring just a few details — such as years of service, basic salary and dearness allowance — the calculator offers a side-by-side view of the projected pension payouts. The aim is to help employees make well-informed decisions about their retirement planning.
AdvertisementDPS also provided a link to access the calculator: https://npstrust.org.in/ups-calculator
What Is The Unified Pension Scheme?
The Unified Pension Scheme is a recent addition to the retirement options available for central government employees. It promises a fixed monthly pension along with a lump sum at the time of retirement. This structure offers a more traditional, guaranteed-income approach compared to the market-linked nature of NPS.
The scheme, recently formalised by the central government, requires employees to contribute 10% of their basic pay plus dearness allowance (DA). The government matches this amount, and the contributions are invested through either default government-managed options or private pension fund managers (PFMs), depending on the employee's preference.
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The pension amount under UPS is calculated based on years of service:
Employees with 25 years or more of service are entitled to 50% of the average basic salary (from the last 12 months) as a monthly pension.
Those with 10 to 25 years of service receive a proportionate pension.
A minimum guaranteed pension of Rs 10,000 per month is provided to those who complete at least 10 years in service.
Family Support And SWP Model
In the event of a pensioner's death, their spouse is entitled to 60% of the pension amount, offering financial continuity to the family. Additionally, the pension distribution follows a Systematic Withdrawal Plan (SWP) model, similar to mutual fund withdrawals. If the pension fund is exhausted during the retiree's or their spouse's lifetime, the government will continue payments from a central reserve pool.
Why The UPS Calculator Is Useful
While the UPS is currently available only to central government employees, state governments may adopt it later. The calculator plays a big role in helping employees to:
Evaluate and compare pension payouts from NPS and UPS.
Select a plan that aligns with their financial goals and lifestyle expectations post-retirement.
Gain clarity on pension projections without needing to crunch complex numbers.
In short, the UPS Calculator simplifies an important financial decision and empowers government officers to plan confidently for the future.
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