New Delhi, Sep 16 – Central government employees have until September 30, 2025, to opt for the Unified Pension Scheme (UPS), a new retirement scheme introduced under the National Pension System (NPS) framework. The scheme, which came into effect on April 1, 2025, was approved by the Cabinet last year and offers a mix of assured pension benefits along with flexible switching options.
According to the Department of Pension and Pensioners’ Welfare, only around 40,000 employees out of the nearly 23.94 lakh NPS subscribers have opted for the UPS so far.
What is the Unified Pension Scheme (UPS)?
The UPS was launched to provide government employees with greater financial security post-retirement, bridging the gap between the Old Pension Scheme (OPS) and the market-linked NPS.
- Employees who complete 25 years of service are assured 50% of their average basic pay (last 12 months) as pension.
- In the event of the pensioner’s death, the spouse receives up to 60% of the pension.
- A minimum pension of ₹10,000 per month is guaranteed after 10 years of service.
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Key Differences Between UPS and NPS
- NPS: Mandatory for employees joining after Jan 1, 2004; pension depends on market returns.
- UPS: Optional; offers an assured payout unlike NPS.
- Contributions:
- UPS: 10% of basic + DA each by employee & employer.
- NPS: 10% by employee & 14% by employer.
- Government Support: In UPS, an additional 8.5% of basic + DA is pooled by the government to guarantee the payout.
- Flexibility: Employees opting for UPS can return to NPS once, up to a year before retirement or three months before VRS.
Why UPS Adoption is Slow?
Despite its benefits, the take-up rate of UPS remains low. Employees’ unions argue that it still doesn’t match the Old Pension Scheme (OPS), which provided 50% of last drawn pay + DA without employee contributions.
The Department of Pension has extended the deadline from June 30 to September 30, citing representations from employees. Awareness drives, including meetings chaired by Pension Secretary V. Srinivas, are ongoing to inform staff about the scheme.
However, employee associations like the Central Secretariat Service Forum insist that both UPS and NPS fall short of OPS and continue to demand its revival.
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