Central Government Employees : The Central Government has released a major update for its employees. This year, the government has introduced several important changes related to pension, retirement, and allowances, directly impacting the pockets of lakhs of employees. Let’s take a look at the major rule changes announced by the government and how they will benefit employees and pensioners.
1. Launch of the New Unified Pension Scheme (UPS)
Starting from April 2025, the government has implemented the Unified Pension Scheme (UPS) — a hybrid of the Old Pension Scheme (OPS) and the National Pension System (NPS).
Under this new UPS:
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Employees who have completed 25 years of service will receive 50% of their last 12 months’ basic salary as a pension.
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Those with at least 10 years of service will be guaranteed a minimum monthly pension of ₹10,000.
This new scheme aims to provide a balanced and secure post-retirement income to government employees.
2. Pension to Start Immediately on Retirement Day
The government has instructed all departments to prepare the retirement files 12–15 months in advance, ensuring that pensions start from the date of retirement itself.
Earlier, there used to be delays in pension activation, causing inconvenience to retirees. This new step will ensure a smooth and timely disbursal of pension benefits.
3. Increase in Dearness Allowance (DA) and Dearness Relief (DR)
To offset the impact of inflation, the government has increased both DA and DR twice in 2025:
- A 2% hike was given for January to June, and
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A 3% hike for July to December.
As a result, the total Dearness Allowance has reached 58%, significantly increasing the monthly income of employees and pensioners alike.
4. Uniform Allowance Based on Service Duration
The Uniform Allowance will now be distributed based on the length of service.
Previously, employees received a fixed annual amount, regardless of when they retired during the year.
Under the new rule, if an employee retires mid-year, the allowance will be calculated proportionally (month-wise), ensuring fair distribution.
5. Revision in Gratuity and Lump Sum Payment
The government has revised the Gratuity and Lump Sum Payment rules to provide greater financial stability.
Under the new Unified Pension Scheme (UPS), employees will now be eligible for both gratuity and lump sum benefits simultaneously.
Earlier, employees under the National Pension System (NPS) were not entitled to these combined benefits, but now NPS employees will also enjoy these advantages, strengthening their financial security at retirement.
Conclusion
The year 2025 has turned out to be a highly beneficial year for Central Government employees and pensioners.
With the introduction of the Unified Pension Scheme, increased DA and DR, timely pension implementation, and revised gratuity rules, the government has taken significant steps to ensure better financial stability and support for its workforce.
