UPS Pension: Government employees should choose their pension system by September 30th. The central government has opened the Unified Pension Scheme (UPS) in addition to the National Pension System (NPS). Under this scheme, employees will receive a fixed monthly pension after retirement.
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UPS Pension: Government employees should choose their pension system by September 30th. The central government has introduced the Unified Pension Scheme (UPS), an alternative to the National Pension System (NPS). Under this scheme, employees will receive a fixed monthly pension after retirement. This system came into effect on April 1st, 2025. Employees can shift from NPS to UPS if they wish. The deadline for this is September 30th, 2025, up from July 31st.
What is UPS?
UPS is a fund-based pension scheme. Under this scheme, employees and the central government contribute 10% of their basic pay + DA. The government will also contribute an additional 8.5%. Based on this contribution, employees will receive a monthly pension upon retirement. The purpose of UPS is to provide employees with a fixed and secure pension.
Who can avail the benefits of UPS?
This scheme is for central government employees who joined after January 1, 2004. They are covered under the NPS. However, railway employees, contract staff, All India Services, and certain other categories are not covered. New employees who join after April 1, 2025, can also opt for the UPS within 30 days.
Difference between NPS and UPS
NPS is market-linked. Returns depend on fluctuations in the equity and debt markets. UPS offers a guaranteed pension. Employees who complete at least 10 years of service under the UPS will receive a guaranteed pension of ₹10,000 per month. Those with 25 years of service will receive a pension of 50% of their average salary for the last 12 months.
Tax Benefits
Employee and employer contributions to both NPS and UPS are income tax-deductible. Government contributions of up to 14% are also exempt. The government’s additional 8.5% contribution to UPS makes it even more attractive.
Other Highlights of UPS
Employees and the government contribute a total of 20%.
The government’s additional 8.5% contribution goes into the pool fund.
Even in the event of voluntary retirement, a pension will be available upon completion of 25 years of service.
Upon retirement, the employee also has the option to withdraw a lump sum amount. This amount will be paid at the rate of 10% of monthly salary for every six months of service.
How to Shift from NPS to UPS?
Employees can choose UPS through both online and offline methods.
Online Method
- Go to the eNPS portal.
- Enter your PRAN number and date of birth and select NPS to UPS Migration.
- Verify with the OTP received on your mobile/email.
- Read and accept the declaration and e-sign.
- Verify by entering the OTP from your Aadhaar.
- Once the process is complete, the application will be submitted and you will receive a receipt number.
Offline Method
- Download Form A2.
- Fill it and submit it to the Head of Office.
- From there, it will be sent to the DDO and then to the CRA.
- The first installment must be deposited within 20 days of the application.
