UPS under NPS by PFRDA Regulations 2025
Unified Pension Scheme (UPS) Under National Pension System (NPS)
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The Pension Fund Regulatory and Development Authority (PFRDA) has introduced the Unified Pension Scheme (UPS) under the National Pension System (NPS) through the Pension Fund Regulatory and Development Authority (Operationalisation of Unified Pension Scheme under National Pension System) Regulations, 2025. This initiative aims to provide an alternative pension option for Central Government employees covered under NPS.
Key Highlights of the Unified Pension Scheme (UPS):
1. Introduction and Objective
The regulations are framed to operationalise the UPS, as notified by the Central Government in the Ministry of Finance’s notification F. No. FX-1/3/2024-PR, dated 24th January 2025.
These regulations define the roles and responsibilities of various stakeholders, including intermediaries and Central Government offices, to ensure smooth implementation.
The regulations will come into effect from 1st April 2025.
2. Definitions and Key Terminologies
The following are important terms defined under the regulations:
Admissible Payout: The amount payable to a UPS subscriber for life, in a specified proportion and manner.
Benchmark Corpus: A specified corpus as per regulation 12.
Default Pattern: The standard choice of pension funds and investment patterns determined by the PFRDA for individual corpus under UPS.
Family Payout: The monthly pension payable to the legally wedded spouse of a deceased subscriber.
Head of Office: A Gazetted Officer as per Delegation of Financial Powers Rules, 2024, or any authority specified by the Central Government.
Individual Corpus: The net asset value of units in a subscriber’s Permanent Retirement Account Number (PRAN).
Legally Wedded Spouse: The spouse listed in service records at the time of superannuation, voluntary retirement, or retirement under Fundamental Rules 56(j) (not treated as a penalty under Central Civil Services (Classification, Control, and Appeal) Rules, 1965).
Pool Corpus: The fund specified under regulation 7.
Qualifying Service: The period of service counted for UPS eligibility as per regulation 13.
Unified Pension Scheme (UPS): An option available to Central Government employees covered under NPS.
UPS Notification: The official notification issued by the Department of Financial Services, Ministry of Finance, bearing F. No. FX-1/3/2024-PR, dated 24th January 2025.
UPS Payout Order: The authorization issued by the Pay and Accounts Officer (PAO) to the National Pension System Trust, specifying payout details.
UPS Subscriber: A Central Government employee who opts for and enrolls in the Unified Pension Scheme.
3. Implementation Framework
The regulations provide a structured framework to operationalise the UPS, ensuring a seamless transition for eligible Central Government employees.
It lays down specific obligations and roles for intermediaries involved in the execution and maintenance of the scheme.
Conclusion
The Unified Pension Scheme (UPS) under NPS represents a significant step towards providing a structured pension alternative for Central Government employees. With clear guidelines and an effective implementation framework, this initiative ensures financial security for employees and their families post-retirement. The regulations provide transparency, standardized payout mechanisms, and a streamlined process for enrollment and management of pensions under UPS.
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