Employees of the Central government have now been granted time till 30 September to opt for the Unified Pension Scheme (UPS) under the National Pension System (NPS) if they so wish. The UPS received the Cabinet’s nod in August of 2024 and into effect from 1 April this year.
Till date, however, only about 40,000 employees of the over 23 lakh employees under the NPS have reportedly chosen UPS, as per data from the Department of Pension and Pensioners’ Welfare.
Until the UPS came into existence, all Central government employees appointed before 1 January, 2004, were covered under the Old Pension Scheme (OPS), which offers a guaranteed fixed pension, whereas those appointed post that date were covered under the market-linked NPS.
While NPS subscribers and employee unions have been seeking the restoration of the OPS for all employees, the government announced the UPS last August.
All Central government employees appointed with effect from 1 January 2004 were mandated to subscribe to NPS, but the UPS was optional. The UPS assures a guaranteed payment of 50 per cent of the average basic pay drawn by the employees in the last 12 months before retirement post a minimum service of 25 years. In case of the death of the pensioner, their spouse will receive assured pension of up to 60 per cent of the pension being drawn.
Employees who decide to go for the UPS by 30 September have a one-time option of reverting to the NPS if they so wish, up to a year before retirement or three months before opting for Voluntary Retirement Scheme (VRS). However, once they have finalized their choice, there is no going back.
