Central Govt Employees Get Till Sept 30 To Opt For UPS

According to officials, the decision has been taken after the Ministry received multiple requests from various stakeholders. Now, employees will be eligible to exercise the option to choose UPS till September 30, they added.    

Earlier, eligible government employees, retirees, and spouses of deceased retirees were given a three-month time limit up to June 30 to exercise their option under the scheme.

The UPS is applicable to central government employees who are covered under the National Pension Scheme (NPS), which came into effect on January 1, 2004. The option to choose between the UPS and the NPS can be exercised by 23 lakh government employees. Once a choice is made, one can't return to the previous scheme.

UPS was approved on August 24, 2024 by the Union Cabinet chaired by PM Narendra Modi. Under the old pension scheme (OPS), which ended in January 2004, employees got 50 per cent of their last drawn basic pay as pension.

Unlike OPS, NPS is contributory, wherein employees will be required to contribute 10 per cent of their basic salary and dearness allowance, while the employer’s contribution (the central government) will be 18.5 per cent. But the eventual payout depends on the market returns on that corpus, mostly invested in government debt.

However, when employees resented the NPS and staged agitations to bring back the OPS, the central government came up with the UPS with the aim of providing stability, dignity, and financial security for them after retirement. 

Even state governments are given the option to adopt and implement the UPS for their employees. Maharashtra is the first state to implement UPS. The Maharashtra Cabinet decided to implement the scheme for state government employees on August 25, 2024. 

UPS Scheme Eligibility

Existing central government employees who are covered under the NPS, who were in service till April 1, 2025, as well as new recruits who joined service on or after April 1, are eligible for the UPS.

Central government employees who were covered under the NPS — and who have superannuated, voluntarily retired, or retired under Fundamental Rules 56(j) on or before March 31, 2025 — are also eligible. The legally wedded spouse of a retired or superannuated central government employee who was an NPS subscriber and has demised before exercising the option for UPS, can also opt in.

The UPS guarantees a minimum pension of Rs 10,000 per month for employees who retire after completing at least 10 years of service. However, employees who superannuated or resigned before 10 years of service, were removed or dismissed from service, are not eligible.

Advantages Under UPS 

Retired employees will receive an assured pension of 50 per cent of their average basic pay over the previous 12 months before retirement. The benefit is given to employees with at least 25 years of service. Similar benefits are offered to employees with shorter service periods ranging from 10 to 25 years.

In case of the pensioner’s death, 60 per cent of the pension they were receiving immediately before their demise will be given to their spouse.

Inflation indexation is provided on the minimum assured and family pensions. The dearness relief (DR) will be based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to those who are in service.

Retirees will also receive a lump-sum payment along with their gratuity, at the time of superannuation. This payment will equal a tenth of the monthly emoluments (pay + DA) as on the date of superannuation, for every six months of completed service. It will not reduce the amount of assured pension.