New UPS Rules Notified: What Government Employees Should Know About The Pension Scheme

The Pension Fund Regulatory and Development Authority on Thursday notified regulations to operationalise the Unified Pension Scheme.

The scheme, introduced as an alternative to the National Pension System for the central government employees, will come into effect from April 1, 2025.

Eligible employees can exercise the option of enrolling themselves under UPS within three months from April 1, or within 30 days from the day joining the services.

Here's an explainer into the new UPS regulations notified by PFRDA, which cover eligibility, contribution, retiral benefits and more.

Unified Pension Scheme: Key Features 

• As per the regulations, UPS will be available to existing central government employees covered under NPS, new recruits, and employees under NPS who superannuated or voluntarily retired.

• The monthly contribution of UPS subscribers will be 10% of the basic pay and dearness allowance.

• The contribution shall be credited to the individual permanent retirement account number of UPS subscribers.

• The monthly contribution of UPS subscribers will be matched by the central government by crediting an equal amount.

• To opt for the scheme, central government employees will have to submit an application to the concerned drawing and disbursing officer to enroll in UPS option under NPS, as per the regulations.

• In case of a new recruit joining on or after April 1, 2025, the existing process of enrolment under NPS will continue. In case the new recruits choose the UPS option, they will be required to submit an application to the concerned DDO.

• After submitting the requisite forms, employees will be identified by the permanent retirement account number tagged to UPS.

Eligibility And Benefits

• UPS benefits will be available in case of an employee superannuating after qualifying service of 10 years, from the date of superannuation.

• The employees will also be eligible for an assured payout under UPS in case of voluntary retirement after a minimum qualifying service period of 25 years, "from the date such employee would have superannuated, if the service period had continued to superannuation."

UPS subscribers will be entitled to lumpsum payment equivalent to one-tenth of last drawn basic pay (including non-practicing allowance, if applicable) and dearness allowance, as on the date of superannuation or voluntary retirement or retirement. This lumpsum payment will be in addition to the assured monthly payout payable to the UPS subscriber.

The assured monthly payout will be 50% of the average basic pay of 12 months prior to the date of superannuation or retirement. The minimum guaranteed payout under UPS will be Rs 10,000 per month, subject to completion of minimum 10 years of qualifying services.