New Delhi: The Pension Fund Regulatory and Development Authority (PFRDA) has given big relief to central government employees by extending the one-time option to shift between the National Pension System (NPS) and the Unified Pension Scheme (UPS). This move will benefit thousands of employees who were earlier unsure about which scheme to choose, giving them more flexibility and security for their retirement planning.
What is UPS?
The Unified Pension Scheme (UPS) was notified by the central government on January 24, 2025. It is an option under the National Pension System (NPS) that provides a fixed benefit similar to the Old Pension Scheme (OPS). The scheme has been implemented from April 1, 2025. UPS has been designed to offer financial security and stability to employees after retirement. Compared to the market-linked NPS, it provides greater security.
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Who Can Opt for This?
As per the latest government notification, this option is available for central government employees who joined service between April 1, 2025, and August 31, 2025. It applies to those who first chose the National Pension System (NPS) but now wish to shift to the Unified Pension Scheme (UPS). However, employees facing dismissal, compulsory retirement, or pending disciplinary action are not eligible. The choice must be made by September 30, 2025, which is also the cut-off date set for other eligible employees and retirees.
Benefits for Employees Under UPS
Shifting to the Unified Pension Scheme (UPS) gives central government staff several key advantages. They can receive an assured monthly pension equal to 50 per cent of their average basic pay from the last 12 months, provided they complete 25 years of service. Even with 10 years of service, employees are guaranteed a minimum pension of Rs 10,000 per month. The scheme also includes family pension benefits, with the spouse entitled to 60 per cent of the last payout, along with dearness relief linked to inflation—similar to DA for current employees.Â
Additionally, a lump sum benefit of 10 per cent of emoluments is paid for every six months of completed service. One crucial point: employees who switch to UPS can later return to NPS, but that decision will be final and irreversible.
Retirement and Death Gratuity
In June, Union Minister Jitendra Singh stated that all central government employees covered under the UPS will now be entitled to retirement and death gratuity, similar to the Old Pension Scheme (OPS). This benefit will be provided under the Central Civil Services (Gratuity Payment under National Pension System) Rules, 2021. An order has been issued by the Department of Pension and Pensioners’ Welfare (DOPPW), stating that employees under UPS will receive OPS-like benefits in case of death, physical disability, or retirement from service. This is expected to be a major relief for employees.
 was notified by the central government on January 24, 2025. It is an option under the National Pension System (NPS) that provides a fixed benefit similar to the Old Pension Scheme (OPS). The scheme has been implemented from April 1, 2025.){kind=link}