Integrated Pension Scheme (IPS) 2025:
The Modi government is set to launch a new pension scheme for central government employees starting April 1, 2025. Named the Integrated Pension Scheme (IPS), this initiative serves as an alternative to the National Pension System (NPS) and aims to provide better financial security for employees post-retirement.
Who is Eligible for the Integrated Pension Scheme?
The Integrated Pension Scheme (IPS) will be available to:
- Central government employees already enrolled in NPS.
- Employees who choose to opt for the new Integrated Pension Scheme within the NPS framework.
- Retired employees who were previously under NPS, with arrears paid along with PPF interest rates.
Key Benefits of the Integrated Pension Scheme
The Integrated Pension Scheme (IPS) 2025 offers several advantages over the existing NPS, including:
Higher Pension Payout: Retired employees will receive 50% of their average basic salary from the last 12 months before retirement, provided they have served for a minimum of 25 years.
Increased Government Contribution: The government’s contribution will increase from 14% to 18.5%.
Fixed Employee Contribution: Employees’ contribution will remain unchanged under the new scheme.
Family Pension Benefit: In case of an employee’s unfortunate demise, their family will receive 60% of the pension amount.
Minimum Pension Guarantee: Employees retiring after at least 10 years of service will receive a minimum pension of ₹10,000 per month.
Who Can Opt for the Integrated Pension Scheme?
- Employees under NPS and Voluntary Retirement Scheme (VRS) can choose to shift to IPS.
- The decision to opt for IPS is final and cannot be reversed.
How Many Employees Will Benefit?
The Integrated Pension Scheme (IPS) is expected to benefit around 23 lakh central government employees. If state governments also implement it, nearly 90 lakh government employees currently under NPS may gain from this pension reform.
What’s Next?
The Finance Ministry has confirmed that eligible employees can switch to the Integrated Pension Scheme within the NPS framework. As the deadline approaches, central government employees must evaluate their options and make an informed decision about their post-retirement financial security.
Why Choose the Integrated Pension Scheme?
The Integrated Pension Scheme (IPS) 2025 provides a higher pension payout, government-backed security, and increased contribution benefits, making it an attractive option for government employees.
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