UPS lumpsum calculation formula: How will Unified Pension Scheme calculate lumpsum amount on retirement?

The Unified Pension Scheme (UPS) will not only offer an assured pension but also gratuity and a lumpsum amount on retirement. The scheme will be available as an option under the National Pension System (NPS) for Central Government employees.

Thus, the lumpsum amount will be calculated using the following formula:

Where;

Emoluments (E) = Basic Pay (including non-practising allowance, if applicable) + Dearness Allowance on the date of superannuation or voluntary retirement or retirement under Fundamental Rules 56(j)

Length of service (L) = number of completed six months of qualifying service as certified by Head of Office.

Any period less than six months will not be taken into account for calculating the lump sum amount.

For example, suppose an employee superannuated after 30 years and his last drawn basic pay + dearness allowance was ₹50,000.

In this case, L will be equal to 30x2, i.e. 60 and E is ₹50,000. Therefore, as per the formula mentioned above, the lumpsum payable will be (₹50,000/10)X60 = ₹300,000

Please note that the lump sum payment will be in addition to the assured pension. "This Lumpsum Payment shall be in addition to the assured payout payable to the UPS subscriber and shall not affect the quantum of assured payout...," PFRDA said.