Unified Pension Scheme (UPS): Everything You Need to Know

The Pension Fund Regulatory and Development Authority (PFRDA) has announced the Unified Pension Scheme (UPS) will be operational from April 1, 2025. This new pension system aims to provide an assured monthly pension to central government employees, replacing the market-linked National Pension System (NPS) for new recruits and offering an option for existing NPS members.

What is Unified Pension Scheme (UPS)?

The Unified Pension Scheme (UPS) is a government-backed pension scheme designed for central government employees. It guarantees an assured pension pay-out, replacing the market-dependent National Pension System (NPS) for new recruits while allowing existing NPS members to opt in. The UPS ensures financial security post-retirement with fixed pension calculations and inflation protection.

Key Highlights of Unified Pension Scheme (UPS)

Eligibility for Unified Pension Scheme (UPS)

Comparison: Unified Pension Scheme (UPS) vs. National Pension System (NPS)

Pension Calculation under UPS

The pension under UPS is calculated as follows:
 

Full Pension

Employees with 25 or more years of service are entitled to a pension equal to 50% of their average basic pay over the last 12 months before retirement. 
 

Example: If an employee's average basic pay in the last 12 months is ₹80,000 and has served office for 25+ years, the monthly pension would be ₹40,000, which is 50% of the basic pay. 
 

Minimum Guaranteed Pension

Employees with at least 10 years of service get a minimum pension of ₹10,000 per month.
 

Proportionate Pension

For employees with service between 10 and 25 years, the pension is calculated proportionally based on their years of service.  
 

Family Pension

In case of the employee's death, the family will receive 60% of the employee's pension.  
 

Lump Sum Payment

Retirees will receive a lump sum payment along with their gratuity at the time of superannuation.  
 

UPS Withdrawal Rules and Conditions

• Partial Withdrawals: Allowed for education, medical emergencies, and home purchase.
• Full Withdrawal: Permitted only upon retirement or superannuation.
• Forfeiture: If an employee resigns or is dismissed from service, they will not be eligible for UPS pension benefits.
• Death Benefits: In case of an employee’s demise, the pension and gratuity benefits will be transferred to their nominee/family members.

Gratuity Benefits under UPS

State Government Adoption of UPS

• Maharashtra has become the first state to implement UPS for state employees.
• If all states adopt UPS, it could benefit nearly 90 lakh government employees across India.

How to Enrol in the Unified Pension Scheme (UPS)?

1. Visit the Protean CRA website from April 1, 2025.
2. Download the enrolment and claim forms.
3. Fill in the details and submit online or physically.
4. Track your UPS pension account online.