Unified Pension Scheme (UPS) Overview 

The Unified Pension Scheme (UPS) provides an assured payout to eligible Central Government employees under the National Pension System (NPS).  

Eligibility Criteria 

Who Can Opt for UPS? 

• Central Government employees covered under NPS. 

• Employees must choose UPS as an option under NPS. 

Cases Where Assured Payout is Available: 

• Superannuation: After a qualifying service of 10 years. 

• Retirement under FR 56(j): If retired by the Government (not as a penalty under the Central Civil Services Rules, 1965). 

• Voluntary Retirement: After completing 25 years of qualifying service. Assured payout will start from the date the employee would have superannuated if service had continued. 

Cases Where Assured Payout is Not Available: 

• Removal or dismissal from service. 

• Resignation by the employee. 

Eligibility for Unified Pension Scheme 

Benefits under the Unified Pension Scheme 

Assured Payout: 

• Rate of Payout: 50% of the last 12 months’ average basic pay for employees completing 25 years of qualifying service. For lesser service periods, payouts are proportionate. 

• Minimum Payout: Employees retiring with 10 years or more of qualifying service are guaranteed a minimum monthly payout of ₹10,000. 

• Family Payout: In case of the employee’s death post-superannuation. A 60% family payout is provided to the legally wedded spouse. Family payouts include Dearness Relief (DR). 

• Dearness Relief (DR): Payable on assured payouts and family payouts. Calculated similarly to Dearness Allowance for serving employees. 

• Lump Sum Payment: 10% of total monthly emoluments (Basic Pay + Dearness Allowance) for every 6 months of completed service. This lump sum payment does not affect the assured payout. 

Key Features and Benefits 

Unified Pension Scheme Corpus 

The Unified Pension Scheme uses two types of funds: 

Individual Corpus: 

• Funded by employee contributions (10% of Basic Pay + DA) and matching contributions by the Central Government. 

Pool Corpus: 

• Funded by an additional 8.5% Central Government contribution (on Basic Pay + DA of all employees opting for UPS). 

• Managed entirely by the Central Government to support assured payouts. 

Investment Options 

• Employees can make investment choices for the individual corpus. These are regulated by the Pension Fund Regulatory and Development Authority (PFRDA). 
• A default pattern of investment applies if no choice is made by the employee. 
• Pool corpus investments are entirely managed by the Government. 

Corpus Structure 

Operationalization for Current Employees 

• Current employees opting for UPS must transfer their NPS corpus to the new UPS individual corpus. 

• A benchmark corpus will be calculated for each employee based on: 

• • Regular contributions (employee and employer). 

• • Default investment patterns. 

• • Assigned values for missing contributions (determined by PFRDA). 

• Shortfall/Excess in Corpus: 

• • If the individual corpus is less than the benchmark corpus, the employee can make additional contributions. 

• • If the individual corpus exceeds the benchmark corpus, the excess amount is credited to the employee’s account. 

Provisions for Past Retirees under NPS 

• Retirees before the effective date i.e April 1, 2025, can opt for UPS. 

• Arrears for the past period along with the interest as per Public Provident Fund rate will be provided. 

• Monthly payouts will be adjusted to account for withdrawals/annuities already paid. 

Other Conditions 

• Employees opting for UPS cannot claim other policy changes or benefits after retirement. 
• Provisions for employees facing disciplinary actions at the time of retirement will be separately notified. 

NOTE: No lump sum will be payable, if the service length is less than 10 years (less than 120 months of contribution), as Unified Pension Scheme is not applicable in such a case. 

Effective Date: April 1, 2025 (from Financial Year 2025-26)