UPS Pension System: The Central Government has implemented a new pension scheme – Unified Pension Scheme (UPS) for its central employees from today.
UPS Pension System: The central government has implemented a new pension scheme – Unified Pension Scheme (UPS) for its central employees from today. In this new pension scheme, all central employees who have been serving for at least 25 years can transfer to UPS from April 1. Under UPS, employees will be eligible to get 50 percent of their average basic salary of the last 12 months before retirement as pension. In this new pension scheme of the government, about 23 lakh government employees will get financial security after retirement.
For whom is the UPS scheme made?
The UPS pension scheme is being brought especially keeping in mind those people who like a stable and predictable income instead of a market-linked pension. Under the new scheme, employees who have served for more than 10 years but less than 25 years will get a minimum pension of Rs 10,000 per month. The enrollment and claim form for the scheme has been available on the official website from April 1, 2025.
What is the hybrid model of UPS
In the event of the death of the pensioner, his family will get 60 percent of the last pension as family pension. Apart from this, central government employees, who are currently under the National Pension System (NPS), can switch to UPS. This scheme is designed as a hybrid model, which includes features of both Old Pension Scheme (OPS) and National Pension System (NPS).
Why was the UPS scheme needed?
While NPS provides market-based returns without any fixed payment, the new scheme UPS, different from NPS, ensures a guaranteed pension amount. OPS was replaced by NPS in 2004. OPS used to provide a fully government-backed pension with periodic dearness allowance revisions. UPS has been introduced in view of growing concerns among government employees about the uncertainties of NPS. Many government employees demanded a more predictable pension system to ensure financial stability after retirement. The government aims to balance employee security with its financial responsibilities through this new scheme.
The move may also influence state governments to explore similar pension models. Those with more than 25 years of service will benefit the most from a 50 per cent guaranteed pension. Employees seeking a stable income after retirement may find UPS more preferable, while those comfortable with market volatility may prefer NPS for potentially higher returns.
Attention NPS subscribers!
The option to migrate to the Unified Pension Scheme (UPS) is now LIVE!
“NPS subscribers can now migrate to the UPS! Simply visit [https://t.co/PkoNmOGuih] and select UPS under NPS to make the switch.”#NPS #UPS@FinMinIndia @PFRDAOfficial
— DFS (@DFS_India) April 1, 2025
PFRDA divides employees into 3 categories
Last week, the Pension Fund Regulatory and Development Authority (PFRDA) officially notified the operation of UPS under the NPS Regulations 2025.
These regulations divide central government employees into three categories-
- The first category includes existing central government employees in service as on April 1, 2025, who are covered under NPS.
- The second category includes new recruits to central government services who join service on or after April 1, 2025.
- The third category includes Central Government employees who were covered under NPS and who have retired on or before March 31, 2025 (voluntarily retired or retired under Fundamental Rule 56(j)) and are eligible for UPS or legally married spouses who have retired or who have passed away before exercising the option for UPS.
- Enrolment and claim forms for all these categories of Central Government employees will be available online on the website – https://npscra.nsdl.co.in from April 1, 2025.
