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The Government of India is very soon to announce some big changes in 2025 to the retirement benefits of Central Government employees as well as pensioners. As a part of a major reform in the pension sector the GOI in year 2025 has announced 5 reforms that would help in modernization of pension schemes increment in allowances and smoothening the retirement process of government employees. Here are 5 such major reforms: 1. Introduction of Unified Pension Scheme (UPS) The government has introduced a new pension scheme named as Unified Pension Scheme (UPS) with effect from April 2025. This UPS would merge the two pension schemes already in existence i.e. NPS and OPS. The main features of the new scheme include the following: Fifty percent of the average basic salary drawn during the last 12 months as pension to employees for those completing 25 years of qualifying service. The pension will be payable as per this provision. However for those already in service on April 1 2025 the minimum pension guaranteed would be 50% of average salary as on March 31 2025. The government also guarantees to provide a minimum monthly pension of ₹10000 to an employee who has completed at least 10 years of qualifying service. The provision for one-time switching back to NPS has been incorporated giving the employee an option to choose his preferred scheme. 2. Dearness Allowance (DA) / Dearness Relief (DR) Hiked: The Government of India has enhanced the Dearness Allowance (DA) / Dearness Relief (DR) of the Central Government employees and pensioners by 2% and 3% during 2025 as under: With effect from July 2025 for the January-June half-yearly period. With effect from January 2026 for the July-December half-yearly period. Thus the DA/DR is now 58%. This enhancement in DA/DR will be of immense benefit to crores of Central Government employees as well as pensioners (who retired before July 2025) as it will help them to meet the rising cost of living. 3. Dress Allowance Increased: In view of the inflationary trend and the steep rise in prices during the recent years the Government of India has enhanced the dress allowance granted to the Central Government employees. The increase in dress allowance will help the employees to partially absorb the increase in the cost of uniforms as well as other related expenditure. 4. Streamlining of Pension Process: The DoPPW has taken several measures to expedite the payment of pensions and retirement dues including the following: Issued instructions to all the Ministries/departments to computerize their service records and to fully operationalize the e-HRMS system. Deployment of Pension Mitras/Welfare Officers in all the departments to guide and assist pensioners in their dealings with the government. Appointment of a High-Level Oversight Committee (HLOC) to ensure the timely and smooth processing of pensions and retirement dues. 5. Extension of the Deadline for Unified Pension Scheme: The government has extended the deadline for the employees to opt for the UPS thus giving them more time to decide. The governments changes in 2025 are a great way to update retirement benefits for its employees. Things like the new Unified Pension Scheme (UPS) the higher allowances (DA/DR) the increased dress allowance and the effort to pay pensions faster are all excellent moves that will really help central government workers and those who are already retired.