UPS Family Pension Overview
The Assured Family Pension is one of the five core pillars of the Unified Pension Scheme. It ensures that in the event of the death of a UPS payout holder after superannuation, the surviving spouse continues to receive a pension for life.
The 60% Rule
The official formula for family payout is:
Family Payout = 60% of the Admissible Payout immediately before the subscriber's death
This means the family pension is based on the actual admissible payout the subscriber was receiving at the time of death — not the theoretical full pension. If the subscriber had taken a final withdrawal (reducing their pension), the family pension is 60% of the reduced amount.
Example Calculation
If an employee's admissible monthly payout is ₹18,000 + DR:
- Family Payout = 60% × ₹18,000 = ₹10,800 + DR
Dearness Relief continues to be applied on the family pension, just as it was on the admissible payout.
Eligibility for Family Pension
According to the official notification, family pension is payable only to the legally wedded spouse of the subscriber, subject to these conditions:
- The spouse must have been legally wedded as on the date of superannuation/VR/FR 56(j) retirement
- The spouse must be surviving the subscriber at the time of the subscriber's death
- A spouse married after the date of superannuation is NOT eligible for family pension
- The family pension continues for the lifetime of the eligible spouse
Impact of Final Withdrawal on Family Pension
If the subscriber chose to withdraw a portion of the corpus as a final withdrawal, this proportionately reduces the admissible payout — and consequently reduces the family pension as well. For example:
- Without withdrawal: Admissible payout = ₹22,500 → Family pension = ₹13,500
- With 60% withdrawal: Admissible payout = ₹22,500 × 0.40 = ₹9,000 → Family pension = ₹5,400
Subscribers must weigh the one-time corpus benefit against the permanent reduction in both their pension and the family pension their spouse would receive.
No Family Pension in Specific Cases
Family pension is not payable if:
- The subscriber was removed or dismissed from service
- The subscriber resigned before completing 10 years of service
- The subscriber superannuated before completing 10 years of qualifying service
- The subscriber's death occurs before superannuation (separate provisions under NPS/CGEGIS may apply in such cases)
DR on Family Pension
Dearness Relief is applied on the family pension in exactly the same manner as it is applied on the assured payout — calculated with reference to AICPI-IW and announced periodically by the government. This ensures that the family pension retains its real value against inflation over time.