A major change regarding pension schemes in India is coming into force from 1 April 2025. The Central Government has launched the Unified Pension Scheme (UPS), which combines important aspects of the National Pension System (NPS) and Old Pension Scheme (OPS). The scheme has been made aimed at ensuring financial security for central government employees. The purpose of UPS is to provide stable and guaranteed income to employees after retirement.
Unified Pension Scheme overview
| Plan details | Information |
| Applied date | 1 April 2025 |
| Beneficiary | Central government employee |
| Minimum monthly pension amount | ₹ 10,000 |
| Eligibility | At least 10 years service |
| Contribution | Staff: 10%, Government: 18.5% |
| Additional benefits | Family Pension, Lump Couple Benefits |
Unified Pension Scheme Details
What is UPS?
Unified Pension Scheme (UPS) is a new pension scheme created by adding elements of NPS and OPS. The scheme provides guaranteed monthly pension to employees after retirement. The government’s contribution to UPS is higher than that of NPS, which ensures its financial stability.
The main advantage of UPS
1. Guaranteed Monthly Pension
- Under UPS, the employee will get a 50% monthly pension of his last 12 months average basic salary after retirement.
- Employees who have completed 10-25 years of service will be given pension on a proportionate basis.
- The minimum monthly pension has been fixed at ₹ 10,000.
2. Family Pension
- If the employee dies, his family will get 60% of the final pension as a family pension.
3. Lump even retirement benefits
- On retirement, the employee will be given a lump equal amount on the basis of 10% per six months service of their basic pay and DA.
4. Investment Options
- The UPS has both individual corpus and pools corpus options available. Employees can choose their fund manager and investment patterns or accept default lifestyle funds.
UPS vs NPS: Comparison
| Parameter | Ups | NPS |
| Guaranteed pension | Yes | No |
| Government’s contribution | 18.5% | 10% |
| Risk level | Less | High |
| Investment option | Safe government bond | Equity and market based |
Eligibility for UPS
The following categories are eligible to join UPS:
- Central government employees who are currently covered under NPS.
- Newly recruited employees who have joined the service on 1 April 2025 or after.
- Employees who have taken voluntary or compulsory retirement till 31 March 2025.
Application process
Enrollment in UPS can be done through both online and offline mediums. Applications will be approved by the related Pay and Accounts Officer (PAO).
The important thing is that the decision to join UPS will be final and irreversible.
Disclaimer
This scheme is applicable only to central government employees. Although UPS provides financial security, the scheme only benefits only those employees who have completed minimum service criteria.
The reality of this scheme is that it is a real government scheme, which is designed keeping in mind the financial stability and demands of the employees.
