Detailed Notes on Unified Pension Scheme (UPS)

The Unified Pension Scheme (UPS) is a pension scheme introduced by the Pension Fund Regulatory and Development Authority (PFRDA) for Central Government employees, as an option under the National Pension System (NPS). It becomes operational from 1 April 2025 for eligible Central Government employees.

The scheme aims to provide assured pension benefits rather than purely market-linked returns, addressing longevity risk and ensuring predictable retirement income.

  • All Central Government employees covered under NPS as on 1 April 2025.
  • New recruits joining on or after 1 April 2025.
  • Retired NPS subscribers with ≥10 years qualifying service.
  • Spouse of deceased NPS subscriber under certain conditions.

Deadline: 30 September 2025 (unless extended). Employees who fail to opt remain under NPS by default.

FeatureDetails
Effective Date1 April 2025
Employee Contribution10% of Basic Pay + DA
Govt ContributionMatching 10% + additional 8.5% to Pool Corpus
Full Pension50% of last 12 months average Basic Pay (after 25 years service)
Minimum Pension₹10,000 per month after 10 years service
Family Pension60% of pension to spouse
Lump Sum1/10 of Basic+DA for each completed six months of service

Example 1: Mr. A has 30 years service with last 12 months average Basic Pay ₹70,000. Pension = 50% × ₹70,000 = ₹35,000/month.

Example 2: Ms. B has 15 years service, Basic Pay ₹50,000 → minimum ₹10,000/month pension.

Example 3: On death, spouse receives 60% of pension (₹21,000 if pension was ₹35,000).

The Unified Pension Scheme (UPS) merges the predictability of the Old Pension Scheme (OPS) with the sustainability of the National Pension System (NPS).

  • Assured Pension: 50% of average Basic Pay (25 years service).
  • Minimum Pension: ₹10,000/month (after 10 years service).
  • Lump Sum & Family Pension benefits included.
  • Deadline to opt: 30 September 2025.