UPS Effective From April 1— Check Eligibility, Payout And Withdrawal Details

The Pension Fund Regulatory and Development Authority had earlier released the draft regulation framework for the Unified Pension Scheme. The 12-chapter draft regulation frameworks was open for consultation and comments till Feb. 17. Coming into effect from Apr. 1, here's an overview of the frame work.

The structure specifies that existing employees as of March 31, 2025, who are already under the NPS are eligible for the scheme. New recruits from April 1, 2025, can opt for either UPS or NPS. While retired employees before March 31, 2025 covered under NPS, and their spouses in case of deceased employees, can opt for UPS. Eligible employees must opt for UPS within a specified timeline. Once chosen, the decision cannot be changed.

Existing employees are to apply using Form A2 to switch to UPS. For new recruits from April 1, 2025, they are to apply immediately upon joining using Form A1.

As for retired employees or those superannuated before March 31, 2025, they must apply using Form B1 if they want to switch to UPS benefits. Deceased employee’s spouses can also apply for UPS, using Form B2.

The eligibility to receive benefits under the UPS are for employees with more than 10 years of qualifying service upon superannuation, and employees retired under Fundamental Rule. Also employees voluntarily retiring after more than 25 years of service, with benefits from the date of what would have been their superannuation, are also eligible.

Under the UPS, a lumpsum equivalent to one-tenth of last drawn basic pay and Dearness Allowance for every completed six months of service is applicable. This lumpsum payment is separate from the assured payout and does not affect it.

There is also a full assured payout of 50% of the average basic pay of the last 12 months. This is available if the subscriber has completed 25 years of qualifying service, contributed regularly, and the individual corpus meets the benchmark corpus.

The minimum guaranteed payout is Rs 10,000 per month if there is more that 10 years of qualifying service and the individual's corpus equals or exceeds the benchmark. There will be a proportionate reduction if there is less than 25 years of qualifying service or missing contributions.

Under the framework, subscribers can withdraw up to 60% of the individual corpus at retirement, which will reduce the assured payout proportionately.

Upon the subscriber’s death, the spouse receives 60% of the last paid assured payout for life, in addition to other vested benefits.

The dearness relief is applicable to both admissible payouts and family payouts, calculated the same way as the Dearness Allowance for serving employees.