The Unified Pension Scheme (UPS) for central government employees will come into effect from April 1, 2025, replacing the existing National Pension Scheme (NPS) for eligible employees. The Pension Fund Regulatory Authority of India (PFRDA) has confirmed that employees currently covered under NPS and those newly recruited on or after April 1, 2025, will be enrolled in UPS.
Under UPS, government employees will receive an assured pension of 50% of their average basic pay drawn over the last 12 months before retirement. This is a shift from the NPS, which provided pension payouts based on market-linked returns. Employees with a minimum of 25 years of qualifying service will be eligible for the full benefits of the scheme.
The UPS will be contributory, requiring employees to contribute 10% of their basic salary and dearness allowance, while the central government will contribute 18.5%. The collected funds will be invested in government debt, with payouts also influenced by market returns on the accumulated corpus.
Enrolment and claim forms for UPS will be available online from April 1, 2025, on the Protean CRA website. Employees can also submit physical forms if preferred. The scheme, however, will not be applicable to employees who have resigned, been dismissed, or removed from service.
The Modi-led Union Cabinet approved UPS on August 24, 2024, with the goal of providing a stable and predictable pension structure for government employees. The shift to UPS is expected to benefit around 23 lakh central government employees, offering them a more secure financial future post-retirement.
