Unified Pension Scheme calculation: Know lump sum on retiring with 53% DA, ₹45,000 basic salary

Opting for UPS will make central government employees eligible for an assured pension and a lump sum payment on retirement, depending on the number of years served.

An employee will be eligible to get a lump sum payment and assured pension on superannuation or voluntary retirement after 25 years of qualifying service or retirement at the age of 60 years.

Lump sum calculation formula

As per the notification, the formula for calculating lump sum payment is the following:

Where L = number of six-monthly completed years of service based on the number of months for contribution to an individual's pension corpus.

“A lump sum payment will be allowed on superannuation @10% of monthly emoluments (basic pay + Dearness Allowance) for every completed six months of qualifying service. This lump sum payment will not affect the quantum of assured payout,” the notification said.

Let’s understand the lump sum calculation with an example, explained in the notification.

• Basic pay as on the date of superannuation/VR/retirement at 60 years: ₹45,000
• Dearness Allowance (DA) @ 53%: ₹23,850

Total emolument = Basic + DA = ₹68,850

Using the formula, the lump will be:

(1/10 x 68,850) x L = ₹6885 x L

Depending on the year of service, the total L will vary.

As per the notification, the amount on lump sum for different service periods will be as follows:

An employee will not be eligible for a lump sum payment if the service length is less than 10 years as UPS is not applicable in such a case.