Unified Pension Scheme for government employees: Key features explained
What's the story
The Pension Fund Regulatory Authority of India (PFRDA) has announced the implementation of the Unified Pension Scheme (UPS) for central government employees, PTI reported.
The announcement comes weeks after a similar notification in January, which was part of the process of implementing UPS for those under the National Pension System (NPS).
The UPS seeks to provide central and state government employees with a guaranteed pension equal to half of their average basic pay over the last 12 months before retirement.
Implementation
Effective date and enrollment details
The PFRDA has said that the UPS regulations will be applicable from April 1, 2025. This includes central government employees in service as of this date and those who are newly recruited thereafter.
Enrollment forms for the UPS will be available online from April 1, 2025.
For those who want to submit forms physically, that option is also available, according to the latest PFRDA announcement.
Requirements
Eligibility and contribution
The option of NPS or UPS is open to 23 lakh central government employees.
However, the guaranteed payment under UPS won't be applicable to employees who are removed, dismissed, or resign from service.
Under the new scheme, employees will have to contribute 10% of their basic salary and dearness allowance (DA), while the government will contribute an additional 8.5%, making the total government contribution 18.5% of basic pay and DA.
The final payout depends on market returns on this corpus.
Guidelines
Conditions and restrictions under the new scheme
The UPS will be an option for central government employees already under NPS.
It also covers new recruits joining central government services on or after April 1, 2025.
Those who retired from NPS before March 31, 2025, either through superannuation or voluntarily, can also join.
Once enrolled in the UPS, you can't withdraw and no additional financial benefits or policy changes can be claimed later.