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Time of India
13 hours ago
- Business
- Time of India
Double gain for UPS subscribers: Gratuity bonanza over and above lump-sum benefit for these government employees, here's how
Central Government employees under the Unified Pension Scheme (UPS) now gain retirement and death gratuity benefits up to Rs 25 lakh, as per the latest rules. This adds to the existing lump-sum payment within UPS, offering a double financial advantage. Read below to know how government employees can benefit from this new development. Tired of too many ads? Remove Ads What did the government say about the gratuity payment under UPS? What does this mean for government employee subscribing to UPS? Tired of too many ads? Remove Ads Serial no. Length of qualifying service Rate of death gratuity 1. Less than one year Two times of emoluments 2. One year or more but less than five years Six times of emoluments. 3. Five years or more but less than eleven years Twelve times of emoluments. 4. Eleven years or more but less than twenty years Twenty times of emoluments. 5. Twenty years or more Half of emoluments for every completed six-monthly period of qualifying service subject to a maximum of thirty three times of emoluments Tired of too many ads? Remove Ads How much lumpsum amount can you get under UPS? Comparison between UPS and NPS Particulars Unified Pension Scheme (UPS) National Pension System (NPS) Employer's contribution The employer contributes 18.5% of the employee's basic salary to the pension fund. The employer deposits 14% of the basic salary into the pension account. Pension Payout Offers a fixed monthly pension, which is 50% of the average basic pay earned in the final 12 months before retirement (for employees completing 25 years of service). No fixed pension is guaranteed. The monthly pension depends on the performance of the investments over time and the final amount accumulated. Employee Contribution Employees will contribute 10% of the basic salary to the pension fund. Employees will contribute 10% of the basic salary to the pension fund. Inflation Adjustment Pension payments are periodically adjusted based on the All-India Consumer Price Index for Industrial Workers (AICPI-IW) to protect against inflation. NPS does not offer automatic inflation adjustments. It does not have a built-in mechanism like DA (Dearness Allowance). Central Government employees who have opted for Unified Pension Scheme UPS ) can now receive retirement and death gratuity benefits of up to Rs 25 lakh, according to the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021. This means UPS subscribers will now enjoy gratuity payments (on both retirement and death in service), along with a lumpsum payment already built in the UPS. UPS subscribers will get a lump sum amount equal to 10% of the emoluments for each completed six months of on to know what this will mean for central government to a press release dated June 18, 2025, the government said: 'The Department of Pension and Pensioners' Welfare vide its OM No. 57/01/2025-P&PW(B)/UPS/10498 dated 18.06.2025, has issued clarification that the Central Government employees opting for Unified Pension Scheme shall be eligible for benefit of 'Retirement gratuity and Death gratuity' under the provisions of the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021.'Shravan Shetty, Managing Director, Primus Partners, says the key benefit is that employees under UPS can now access lump sum gratuity payouts upon retirement or in the unfortunate event of death in service—benefits that were earlier unclear or unavailable.'This update under the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021 gives UPS subscribers a more comprehensive social security net and provides financial support to families and retirees during critical life stages,' says Ahmed, Partner, Singhania & Co agrees with Shetty and adds: 'UPS subscribers get both benefits – lump sum benefits from UPS itself and gratuity benefits carried over from NPS rules.'The retirement gratuity formula under Rule 22 of Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021 is:'..retirement gratuity equal to one-fourth of his emoluments for each completed six monthly period of qualifying service, subject to a maximum of 16 1⁄2 times the emoluments.'The death gratuity formula under Rule 22 of Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021 is:Source: Rule 22 of Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021The term emoluments means basic pay plus dearness allowance (DA). As per the said rules, stagnation increment is treated as emoluments for calculation of gratuity amount has been increased up to Rs 25 lakh. According to an office memorandum dated May 30, 2024, '..the maximum limit of Retirement Gratuity and Death Gratuity under the Central Civil Services (Pension) Rules, 2021 or the Central Civil Services (Payment of Gratuity under National Pension System), Rules 2021, would be increased by 25% i.e. from Rs 20 lakh to Rs 25 lakh with effect from January 1, 2024.'The government has not yet clarified or explained that government employees opting for UPS will not get Lumpsum and retiral/death gratuity benefits both, hence experts have interpreted the law and answered that the said employees will get both the benefits under UPS, until the government clarifies this is not the Joshi, Senior Associate, PSL Advocates & Solicitors says: "By way of these clarifications, the DoPPW has resolved several concerns of the employees with regard to losing their gratuity benefits while opting-in for the UPS. This development marks a progressive blending of old and new pension schemes and reflects the beneficial nature of the framework. As the gaps between UPS and Oold Pension Scheme (OPS) are now resolved, it ensures parity and is likely to encourage employees to opt for UPS with an option to avail benefits of OPS as well."A lump sum amount is calculated as 1/10th of their last drawn monthly pay for every six months of completed says: 'Upon retirement, employees will receive a one- time payment alongside gratuity, calculated as 1/10th of their monthly salary (basic pay plus Dearness Allowance) for every six completed service months. This extra amount does not affect the assured pension.'If we compare the lumpsum benefit under UPS with NPS, then under NPS employees can withdraw up to 60% of the NPS corpus as lump sum on superannuation, which could be bigger than the lump-sum received under UPS. However, the regular income generated by annuity purchased with 40% of the remaining retirement corpus may not be as big as in case of in NPS, the employees have the option of investing their corpus in equities which isn't possible with UPS. This means there is a greater potential for a bigger corpus in NPS compared to UPS, especially if the stock market yields returns of over 8% to 10% per annum during their a table showing how UPS and NPS differs:
India.com
03-06-2025
- Business
- India.com
DA Hike Update: How Much Dearness Allowance Is Likely To Increase Ahead Of 8th Pay Commission? Can April AICPI Figures Throw Hints?
photoDetails english 2910389 Updated:Jun 03, 2025, 10:44 AM IST 7th Pay Commission DA, DR Hike Update 1 / 9 The Labour Beaureau has released AICPI-IW Figures for April 2025, fueling speculations on the next round (July-December 2025) of Dearness Allowance (DA) and Dearness Relief (DR) hike for lakhs of govt employees and pensioners. April 2025 AICPI-IW Figures 2 / 9 As per the data published by Labour Bureau, attached office of the M/o Labour & Employment the All-India CPI-IW for April, 2025 increased by 0.5 point and stood at 143.5 (one hundred forty three point five). Year-on-year inflation for the month of April, 2025 stood at 2.94% as compared to 3.87% in April, 2024. AICPI-IW Figures Collected By Labour Bureau 3 / 9 The Bureau has been compiling Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country. April 2025 AICPI-IW Figures Vs May, Feb Data 4 / 9 The rise in April 2025 AICPI-IW Figures comes after rise in the last two months of the CPI-IW. March 2025, the All-India Consumer Price Index for Industrial Workers (AICPI-IW) stood at 143.0, representing a 0.2-point increase from the previous month. Year-on-year inflation for the month of March, 2025 stood at 2.95% as compared to 4.20% in March, 2024. The All-India Consumer Price Index for Industrial Workers (AICPI-IW) stood at 142.8 in February 2025, according to the Labour Bureau. How Much Dearness Allowance May Increase Ahead Of 8th Pay Commission? 5 / 9 The straight hikes in AICPI-IW Figures for April and March, after two consecutive declines in January and February hint at upward revision of DA by another 2 percent. DA will be thus likely be pushed from current 55 percent to 57 percent, ahead of the implementation the 8th Pay Commission from January 2026. DA Hiked To 55 Percent For Jan-June 2025 6 / 9 Much to market expectations, the Union Cabinet led by PM Narendra Modi on March 28 announced the much awaited Dearness Allowance (DA) and Dearness Relief Hike for lakhs of central government employees. The Modi government today announced hiked the dearness allowance by 2 percent, thus taking the DA from 53 percent to 52 percent. DA Hiked To 55 Percent From 53 Percent: How Much Salary Will Increase 7 / 9 The 2 percent DA hike has been the lowest DA hike in the last 7 years. The 2 percent increase in DA marked the lowest DA hike since July 2018. The last DA Hike was announced in October 2024. Union Cabinet approved a 3 percent Dearness Allowance (DA) increase for central government employees. A dearness allowance of 53 percent of basic pay is being provided to central government employees, as opposed to the previous 50 percent. How Much Salary Increased At Last DA Hike? 8 / 9 The basic salary of the employee is Rs 18,000 Dearness Allowance Hiked To 55 Percent: Pay increase of Rs 360 more per month New Dearness Allowance Annually: Rs 4,320 DA Hike Twice A Calendar Year 9 / 9 Dearness Allowance (DA) hikes are based on the average All India Consumer Price Index (CPI-IW) for industrial workers, which reflects changes in the cost of living. The government announces a DA/DR hike twice a year. However, the announcements are made in March and September. The hike is applied retroactively every year between January and July.
