Last date For Opting For Unified Pension Scheme Extended Till November 30

In a communication to the Pension Fund Regulatory Development Authority (PFRDA), the agency designated to manage the fund, the Ministry of Finance said, “As per PFRDA (Operationalisation of UPS under NPS) Regulations, 2025, eligible existing employees, past retirees and legally wedded spouse of the deceased past retirees have been given time-frame of three months to exercise choice for UPS i.e. up to 30 June, 2025.”

However, based on various representations received from stakeholders, this deadline was “subsequently extended till 30.09.2025 vide this Department’s OM dated 01.07.2025,” it said.

“Various positive changes have been announced recently under UPS including the switch option, benefits on resignation, compulsory retirement, tax exemptions etc. Requests have been received from various stakeholders seeking more time for employees to exercise the option in view of these changes.

Accordingly, it has been decided to extend the cut-off date to exercise choice for UPS by two more months i.e. up to 30th November, 2025 for eligible existing employees, past retirees and legally wedded spouse of the deceased past retirees,” the Ministry of Finance said in the communication.

Noting that the decision is being communicated to the agency with approval of Finance Minister Nirmala Sitharaman, it further advised the PFRDA to carry out necessary changes including “required entablements in the CRA systems, regulations, or issue of a circular to give effect to the decision of the Government in this regard”. 

UPS Launched As An Alternative To NPS

Operational since 1 April 2025, the UPS was launched as an alternative to the NPS, addressing persistent concerns among employees. A key criticism of NPS has been its shift away from the earlier ‘defined benefit’ system, which guaranteed a predictable monthly pension. In contrast, NPS offers fixed contributions but market-linked returns, leading to uncertainty in retirement income. NPS also mandates annuity purchases, tying retirees to prevailing annuity rates, which may not always be favorable.

The UPS seeks to resolve these issues by ensuring a guaranteed pension. Employees completing 25 years or more in central government service are eligible for a pension equal to 50 percent of their average salary of the last 12 months of service. Even those with just 10 years of service are assured a minimum pension of Rs 10,000 per month, with proportional payouts for service periods between 10 and 25 years. Crucially, UPS pensions are indexed to inflation through adjustments in dearness relief, safeguarding retirees’ lifestyles.

The UPS contributions also differ, as employees are required to contribute 10 percent of their basic pay plus dearness allowance, matched by the employer. Additionally, the government contributes an extra 8.5 percent into a separate pooled fund, raising its total contribution to 18.5 percent, higher than the NPS’s 14 percent.

The UPS also provides a one-time lump sum equal to one-tenth of the last drawn basic pay plus DA for every six months of qualifying service, equating to five months’ salary for 25 years of service.