Over 1.36 Lakh Railway Employees to Gain from New Pension Scheme

More than 1.36 lakh employees of Central Railway and Western Railway are expected to benefit from the recently announced Unified Pension Scheme (UPS) by the Union Government, officials stated on Monday. The Narendra Modi-led Centre approved the UPS for central government employees who joined service after January 1, 2004, on Saturday.

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Unified Pension Scheme Details

Employees under the National Pension Scheme (NPS) opting for UPS will receive an assured pension of 50 per cent of the average basic pay drawn over the last 12 months before retirement. The minimum qualifying service has been set at 25 years. Central Railway currently has 96,039 employees, with 70,778 or 73.69 per cent being NPS subscribers who will benefit from UPS, according to general manager Ram Karan Yadav.

Western Railway has about 96,000 employees, with approximately 66,000 or 70 per cent being NPS subscribers. "The majority of WR employees will benefit from UPS," said Ashok Kumar Mishra, the zone's general manager, during a media interaction at Churchgate.

Financial Implications and Employee Options

Railway officials noted that since UPS is not market-linked like NPS, it will eliminate uncertainty about pension amounts, which was a major concern for employees. However, they admitted that the increased government or employer contribution to 18.5 per cent from the existing 14 per cent under NPS would impose some financial burden on zonal railways.

Currently, Central Railway contributes Rs 45.5 crores per month for all employees covered under NPS, while Western Railway's contribution stands at Rs 42 crore. Employees will have the option to choose between NPS and UPS once details are received from the railway board.

The UPS will be implemented from April 1, 2025, and is expected to benefit 23 lakh Central government employees.