RAS question
The Unified Pension Scheme (UPS) announced in 2024 provides:
Correct answer: (B) 50% of average basic pay of last 12 months as assured pension for 25+ years of service.
The Unified Pension Scheme provides an assured pension equal to 50% of the average basic pay drawn over the last 12 months before superannuation for employees with at least 25 years of qualifying service.
Explanation
UPS is not a fully market-linked pension design; its central feature is an assured pension formula. The PIB release says the assured pension is 50% of the average basic pay drawn over the last 12 months before superannuation, provided the employee has a minimum qualifying service of 25 years. UPS is effective from 1 April 2025. For service below 25 years, the pension is proportionately reduced, subject to the minimum qualifying service of 10 years. The assured minimum pension is Rs 10,000 per month on superannuation after at least 10 years of service. Therefore, option B captures both the percentage and the qualifying-service condition correctly.
Why the other options are wrong
- (A) UPS has an assured pension component, so describing it as having no assured pension and being fully market-linked misses the scheme's defining feature.
- (C) The formula is 50% of the average basic pay over the last 12 months before superannuation, not 100% of the last drawn salary.
- (D) UPS is linked to the employee's average basic pay and qualifying service, while Rs 10,000 per month is only the assured minimum pension after at least 10 years of service.
Concept
This tests the Indian Economy theme of pension reform and social-security design. RAS can turn such schemes into precise formula questions, especially where the answer depends on a percentage, a service threshold, and an assured minimum.