The government launched the Unified Pension Scheme (UPS) to consolidate the retirement benefits of various pension schemes under a single scheme. UPS workers receive a guaranteed and secure income upon retirement. The scheme’s terms and conditions for voluntary retirement are clear.
Age and service period conditions for VRS
If an employee wishes to take voluntary retirement under UPS , they must meet certain age and service requirements. Pension benefits are available only after completing a certain number of years of service. The scheme also provides protection for accrued benefits. This is important because employees may need financial support after premature retirement. A key feature of this scheme is the timely disbursement of pensions.
Pension starts after retirement
The pension system is designed to ensure that pensions begin within a specific timeframe, either through voluntary retirement or early retirement. Previous schemes often took a long time for pensions to begin. This limitation has been addressed in the UPS. However, it still takes one to three months. This scheme aims to ensure that bureaucracy does not interfere with employees’ pensions after retirement.
Advice to take VRS decision thoughtfully
UPS employees receive a guaranteed minimum pension. This provides assurance of a pension upon retirement, regardless of market fluctuations or any reduction in contributions. Experts say that despite this, employees should carefully consider their current liabilities and future needs before deciding on voluntary retirement.
20 years of service period is required for VRS
UPS rules state that if an employee decides to take voluntary retirement after completing 20 years of service, they will receive retirement benefits proportionate to their service period. However, they will be entitled to a one-time lump sum payment (10%). The final withdrawal (60%) will be made at the time of VRS. Under this scheme, the service period for VRS (voluntary retirement) has been reduced from 25 years to 20 years.
Full assured payment after 25 years of service period
Under this scheme, the full assured payment is available only after the employee completes 25 years of service. If the pensioner dies after VRS but before the assured pension begins, the family payout to the spouse will begin from the date of the pensioner’s death.
