Unified Pension Scheme (UPS) Introduced Under National Pension System Gazette Notification Issued.
Download UPS (Unified Pension Scheme) Gazette Issued for Central Government Employees in PDF
New Delhi, January 24, 2025
The Ministry of Finance (Department of Financial Services) has announced the introduction of the Unified Pension Scheme (UPS) under the National Pension System (NPS), providing an optional pension framework for Central Government employees covered under the NPS. This decision, notified through F. No. FX-1/3/2024-PR, modifies prior notifications from 2003 and 2019 and will take effect on April 1, 2025.
Eligibility Criteria
The Unified Pension Scheme will be available to Central Government employees under the NPS who choose to opt in. The following eligibility conditions apply:
Assured Payout Cases:
Superannuation after at least 10 years of qualifying service.
Retirement under Fundamental Rule 56 (j) without penalty.
Voluntary retirement after 25 years of qualifying service, with payout commencing from the date of superannuation.
Exclusions:
Employees dismissed, removed, or resigning from service are ineligible for assured payouts.
Key Features and Benefits
Assured Payouts:
Full payout equivalent to 50% of the average basic pay of the last 12 months for employees with a minimum of 25 years of qualifying service.
Proportionate payouts for shorter service periods.
A minimum guaranteed payout of ₹10,000 per month for employees with at least 10 years of qualifying service.
Family Benefits:
In the event of the payout holder’s death, 60% of the payout will be assured to the legally wedded spouse.
Dearness Relief (DR):
DR will be calculated similar to Dearness Allowance for serving employees and paid when payouts commence.
Lump Sum Payment:
Upon superannuation, employees will receive 10% of monthly emoluments (basic pay + DA) for every six months of qualifying service without affecting the payout quantum.
Dual Corpus Structure:
Individual Corpus: Employee contributions (10% of basic pay + DA) matched by the Central Government.
Pool Corpus: Additional 8.5% contribution by the Central Government for funding assured payouts.
Investment Options:
Employees can choose investment patterns for their individual corpus, regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
The pool corpus will be managed by the Central Government.
Benchmark Corpus:
A benchmark corpus value will be computed to ensure parity in contributions and investments, enabling proportional payouts.
Options for Past Retirees:
Retirees before the operational date can opt in, with arrears and interest paid at Public Provident Fund rates.
Operational Guidelines
Employees must authorize the transfer of individual corpus to the pool corpus at retirement.
Disciplinary cases at the time of superannuation will have separate payout guidelines.
PFRDA will issue detailed regulations for seamless implementation.
Important Provisions
Employees opting for the Unified Pension Scheme will not be entitled to any additional concessions, benefits, or parity with future policy changes.
The scheme emphasizes regular contributions and investments for assured payouts.
The Unified Pension Scheme provides a significant enhancement to the pension options available under the NPS, ensuring greater security for Central Government employees and their families.
