Central government employees coming under UPS will now be eligible for retirement and death gratuity benefits as per the Central Civil Services Rules 2021.
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There is good news for central employees. Now all government employees covered under the Unified Pension Scheme (UPS) will be entitled to retirement and death gratuity benefits under the Old Pension Scheme (OPS). This has been announced by Union Minister of State Dr. Jitendra Singh.
Central government employees covered under UPS will now be eligible for retirement and death gratuity benefits as per the provisions of the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.
Union Minister announces
Union Minister of State Dr Jitendra Singh has announced that Central Government employees covered under the Integrated Pension Scheme will now be eligible for retirement and death gratuity benefits as per the provisions of the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.
The move meets an important demand of government employees and brings parity in retirement benefits. The new provision reflects the government’s commitment to ensure social security for all categories of employees under NPS.
Facility like OPS now in UPS too
Under the new rules, now the central government employees included in UPS will also be eligible for the benefit of gratuity as per the Central Civil Services Rules, 2021. Earlier this benefit was available only to employees with OPS. According to the Ministry of Personnel, in the event of death, disability or invalidity of the employee during service, now UPS employees will also be able to get the same benefits as OPS, for this they will have to give an option in their service record. DOPPW (Department of Pension) has also issued a new order in this regard, which will give UPS employees the right to choose the benefits available under OPS.
Benefit of Retirement Gratuity and Death Gratuity
The Department of Financial Services, Ministry of Finance vide its notification dated 24.01.2025 had notified UPS as an option under NPS for new entrants into Central Government Civil Services with effect from 01.04.2025. Central Government employees covered under NPS were given a one-time option to join UPS.
In light of the above, the Department of Pension and Pensioners Welfare vide its OM dated 18.06.2025 has clarified that Central Government employees opting for UPS shall be eligible for the benefit of ‘Retirement Gratuity and Death Gratuity’ under the provisions of Central Civil Services Rules, 2021.
Let us know how different UPS is from NPS
How will you get benefits in UPS
Assured Pension: 50 percent of the average basic salary received in the last 12 months before retirement for a minimum qualifying service of 25 years. This salary will be proportional for reduced service period up to a minimum service period of 10 years.
Assured Family Pension: 60 percent of the employee’s pension immediately before his death.
Assured Minimum Pension: Rs 10,000 per month on retirement after a minimum service period of 10 years.
Inflation Index: On assured pension, on assured family pension and on assured minimum pension. Dearness relief based on All India Consumer Price Index for Industrial Workers (AICPE-IW). In case of military personnel, lump sum payment at the time of retirement in addition to gratuity, for every six completed months of service, 1/10th of the monthly emoluments (pay + DA) on the date of retirement. This payment will not reduce the amount of assured pension.
How to get pension in NPS
- NPS is a contributory scheme, under which a government employee has to give 10% of his basic salary in his pension and the state government contributes only 14% in it.
- In NPS, the employee gets 60% of the amount at the time of retirement. The remaining 40% amount is used for pension. There is no permanent provision of gratuity at the time of retirement in NPS. Dearness Allowance (DA) which is received after 6 months in New Pension Scheme (NPS) is not applicable.
- Under the new pension scheme, 40% of the NPS fund has to be invested to get pension on retirement. There is no guarantee of fixed pension after retirement. NPS is based on the stock market. There is no provision of dearness allowance in it.
- In NPS, there is a provision to give 50% of the total salary as pension to the family members of the employee in case of his death during service. In the new pension scheme, whatever money you get on retirement according to the stock market, you have to pay tax on it.
