On September 9, 2025, the Department of Pension and Pensioners’ Welfare (DoPPW) held a video conference with all Ministries and Departments to raise awareness of the Unified Pension Scheme (UPS) under the Central Civil Services (Implementation of UPS under the NPS) Rules, 2025. The meeting’s primary goal was to ensure all eligible Central Government employees under the National Pension System (NPS) make a well-informed decision about opting for the UPS within the stipulated timeframe.
DoPPW Holds Key Meeting on Unified Pension Scheme (UPS) for Central Government Employees
Key Highlights of the Unified Pension Scheme (UPS)
The UPS, which became operational on April 1, 2025, offers a hybrid model that combines the assured pension of the Old Pension Scheme (OPS) with the contribution-based structure of the NPS. It was introduced to address employee concerns about the market-linked returns of NPS and to provide a guaranteed post-retirement income.
The key features of the UPS include:
- Assured Pension: It guarantees a monthly pension of 50% of the average basic pay drawn over the last 12 months for employees with at least 25 years of service. A minimum pension of Rs. 10,000 per month is assured for employees with 10 or more years of service.
- Government Contribution: The government’s contribution to the scheme is 18.5% of the basic salary plus Dearness Allowance (DA), which is higher than the 14% contribution under NPS.
- Gratuity and Family Pension: The scheme includes benefits like retirement gratuity and death gratuity, similar to the OPS. In case of the pensioner’s death, the family is assured of a pension equal to 60% of the last payout.
- Inflation Indexation: Pensions under the UPS are linked to the All India Consumer Price Index for Industrial Workers (AICPI-IW), providing a hedge against inflation through Dearness Relief (DR).
Eligibility and Deadline
The option to switch to UPS is a one-time opportunity for eligible Central Government employees. The deadline for opting into the UPS is September 30, 2025. This date applies to existing employees who are currently subscribed to NPS, as well as past retirees and the spouses of deceased retirees who meet the eligibility criteria. Newly recruited government employees joining on or after April 1, 2025, must exercise their option within 30 days of joining.
The Awareness Drive
The DoPPW’s video conference with various Ministries and Departments is part of a broader awareness campaign to ensure employees don’t miss the deadline. With a low number of employees having opted for the UPS so far, the government is intensifying its outreach efforts. This includes a focus on employees in remote areas and paramilitary forces, where the rate of opting for Voluntary Retirement Scheme (VRS) is higher. The new rules, which allow for full pension benefits after 20 years of service instead of 25, are a key incentive being highlighted in this awareness drive.
Switch Facility
While the option to join the UPS is a one-time choice, the Ministry of Finance has introduced a one-time, one-way switch facility allowing employees who have opted for the UPS to revert back to NPS under specific conditions. This switch can be exercised only once, at least one year before superannuation or three months before voluntary retirement. This provision aims to give employees more flexibility and a second chance to align their pension plan with their financial goals and risk tolerance.
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