Unified Pension Scheme (UPS) – Explained
Effective from April 1, 2025 | Central Government Employees under NPS
ЁЯУЛ Overview
The Unified Pension Scheme is a revamped retirement benefit system applicable to Central Government employees under the National Pension System (NPS), offering an assured monthly payout post-retirement.
✅ Eligibility
- Minimum 10 years of service required.
- Applicable on superannuation, FR 56(j) (non-penal), or voluntary retirement after 25 years.
- Not available in case of resignation, dismissal, or removal.
ЁЯТ░ Key Benefits
- 50% of last 12-month average basic pay (after 25 years of service).
- Minimum assured pension: ₹10,000/month after 10 years of service.
- Family pension: 60% to spouse after death.
- Dearness Relief (DR) linked to DA for serving employees.
- Lump sum: 10% of (Basic + DA) for every 6 months served.
ЁЯТ╝ Structure of Pension Corpus
- Individual Corpus: Employee’s 10% + matching 10% by Govt.
- Pool Corpus: Additional 8.5% Govt. contribution for assured payouts.
ЁЯУИ Investment Options
- Employees can manage their individual corpus investment per PFRDA rules.
- Default pattern applies if no option is selected.
- Pool corpus investment is handled by the Government.
ЁЯФБ Transitioning to the Unified Pension Scheme
- Existing NPS employees and new recruits can choose between NPS & UPS.
- Choice is final and cannot be reversed.
- For those retiring before April 1, 2025: PFRDA will handle top-ups, and arrears + interest will be paid.
⚖️ At the Time of Retirement
- Service is validated, and corpus is compared to a benchmark set by PFRDA.
- If short: employee can voluntarily pay the gap.
- If excess: surplus remains with employee.
- If benchmark not met: payout is reduced proportionately.
❌ Restrictions & Clarifications
- No other pension benefits can be claimed after opting into UPS.
- Separate rules will cover those facing disciplinary proceedings.
- PFRDA will release detailed implementation guidelines.
ЁЯУЕ Effective Date
The Unified Pension Scheme comes into force from 1st April 2025.
ЁЯУК Understanding Assured Pension Payout
Abbreviations Used:
- P: Average basic pay in the last 12 months before retirement.
- Q: Number of months of qualifying service.
- IC: Individual corpus value accumulated by the employee.
- BC: Benchmark corpus value for payout calculations.
- DR: Dearness Relief, applicable on payouts for inflation adjustment.
Illustrative Payout Scenarios:
Scenario 1: Employee completes 25+ years of service and fulfills all conditions.
| Factor | Value |
|---|---|
| Average Basic Pay (P) | ₹45,000 |
| Qualifying Service (Q) | 300 months |
| Individual Corpus (IC) | ₹50,00,000 |
| Benchmark Corpus (BC) | ₹50,00,000 |
| Final Payout | ₹22,500 + DR |
Scenario 2: Employee has 15 years of service.
| Factor | Value |
|---|---|
| Qualifying Service (Q) | 180 months |
| Individual Corpus (IC) | ₹30,00,000 |
| Benchmark Corpus (BC) | ₹30,00,000 |
| Final Payout | ₹13,500 + DR |
Scenario 3: Employee has 10 years of service.
| Factor | Value |
|---|---|
| Qualifying Service (Q) | 120 months |
| Individual Corpus (IC) | ₹25,00,000 |
| Benchmark Corpus (BC) | ₹25,00,000 |
| Final Payout | ₹10,000 + DR (Minimum Guaranteed) |
Scenario 4: Employee has missing contributions.
| Factor | Value |
|---|---|
| Individual Corpus (IC) | ₹45,00,000 |
| Benchmark Corpus (BC) | ₹50,00,000 |
| Final Payout | ₹20,250 + DR |
Scenario 5: Employee made partial withdrawals from individual corpus.
| Factor | Value |
|---|---|
| Individual Corpus (IC) | ₹40,00,000 |
| Benchmark Corpus (BC) | ₹50,00,000 |
| Final Payout | ₹18,000 + DR |
Scenario 6: Employee opted for investment choices and individual corpus exceeds benchmark corpus.
| Factor | Value |
|---|---|
| Individual Corpus (IC) | ₹55,00,000 |
| Benchmark Corpus (BC) | ₹50,00,000 |
| Final Payout | ₹22,500 + DR + ₹5,00,000 excess corpus credit |
Scenario 7a: Employee opted for investment choices, individual corpus is lower than benchmark corpus.
| Factor | Value |
|---|---|
| Individual Corpus (IC) | ₹45,00,000 |
| Benchmark Corpus (BC) | ₹50,00,000 |
| Final Payout | ₹20,250 + DR |
Scenario 7b: Employee partially recoups individual corpus shortfall.
| Factor | Value |
|---|---|
| Individual Corpus (IC) | ₹47,50,000 |
| Benchmark Corpus (BC) | ₹50,00,000 |
| Final Payout | ₹21,375 + DR |
Key Takeaways:
- Employees with **longer service** receive **higher payouts**.
- **Missing contributions or withdrawals** lower final payouts.
- Investment choices **directly impact corpus value and payout**.
- Employees **can voluntarily pay gaps** if their corpus is below the benchmark.
ЁЯТ░ Lump Sum Payment Calculation
At the time of **superannuation, voluntary retirement, or retirement under FR 56(j)**, employees receive a lump sum amount based on their **total emoluments** and the number of completed **six-month service periods**.
Formula:
Lump Sum Amount = (1/10 of Emoluments) × L
Where **L** represents the number of full six-month service periods.
| Length of Qualifying Service | Completed Six-Month Periods (L) | Lump Sum Amount (₹) |
|---|---|---|
| 10 years (120 months) | 20 | ₹1,37,700 |
| 15 years (180 months) | 30 | ₹2,06,550 |
| 20 years (240 months) | 40 | ₹2,75,400 |
| 25 years (300 months) | 50 | ₹3,44,250 |
| 30 years (360 months) | 60 | ₹4,13,100 |
| 35 years (420 months) | 70 | ₹4,81,950 |
Note: No lump sum will be payable for service periods **less than 10 years (120 months)**.
ЁЯУЛ рм╕ାрм░ାଂрм╢ (Overview)
рмПрмХୀрмХୃрмд рмкେрми୍рм╕рми рмпୋрмЬрмиା (UPS) рм╣େрмЙрмЫି **рмПрмХ рмиୂрмдрми рмкୁрмиଃрмЧрмаିрмд рмЕрммрм╕рм░ рмк୍рм░ାрмк୍рмдି рм▓ାрмн рмЙрмкрмпୋрмЧ**, рмпାрм╣ା **рмЬାрмдୀрнЯ рмкେрми୍рм╕рми рмкрмж୍рмзрмдି (NPS)** рмЕрми୍рмдрм░୍рмЧрмд рмХେрми୍рмж୍рм░ рм╕рм░рмХାрм░ рмХрм░୍рмормЪାрм░ୀрмЩ୍рмХ рмкାрмЗଁ рмЙрмкрм▓рмм୍рмз। рмПрм╣ା рмЕрммрм╕рм░ рмкрм░େ **рмиିрм╢୍рмЪିрмд рмоାрм╕ିрмХ рмЧ୍рнЯାрм░ାрмг୍рмЯି рмкେрми୍рм╕рми** рмжେрмм।
✅ рмкାрмд୍рм░рмдା (Eligibility)
- рмХрморм░େ рнзрнж рммрм░୍рм╖рм░ рм╕େрммା рмжрм░рмХାрм░।
- рмПрм╣ି рмпୋрмЬрмиା **рмЕрммрм╕рм░ рмж୍рн▒ାрм░ା, FR 56(j)** (рмЕрмк୍рм░рм╢ିрмХ୍рм╖ିрмд), рмПрммଂ рнирнл рммрм░୍рм╖ рмкрм░େ рм╕୍рм╡େрмЪ୍рмЫିрмХ рмЕрммрм╕рм░ рмЙрмкрм▓рмм୍рмз।
- рмпрмжି **рмкрмжрмоୁрмЦ୍рнЯ рмЫାрмб଼ିрммା, рммрм░୍рмЬрми рмХିрмо୍рммା рммାрмж** рм╣ୁрмП, рмдେрммେ рмПрм╣ି рмпୋрмЬрмиା рм▓ାрмЧୁ рм╣େрмм рмиାрм╣ିଁ।
ЁЯТ░ рмоୁрмЦ୍рнЯ рм▓ାрмн (Key Benefits)
- рнирнл рммрм░୍рм╖ рм╕େрммା рмкрм░େ рм╢େрм╖ рнзрни рмоାрм╕рм░ рмоାрмз୍рнЯрмо рммେрмдрмирм░ рнлрнж% рмкେрми୍рм╕рми рмжେрнЯ।
- рмХрмо рмЕрмЯେ: ₹10,000/рмоାрм╕ (рнзрнж рммрм░୍рм╖рм░ рм╕େрммା рмкрм░େ)।
- рмкрм░ିрммାрм░ рмкେрми୍рм╕рми: рмоୃрмд୍рнЯୁ рмкрм░େ рм╕୍рмкାрмЙрм╕ рмЩ୍рмХୁ рнмрнж% рмжେрнЯ।
- рморм╣рмЩ୍рмЧାрмЗ рмнрмд୍рмдା (Dearness Relief - DR) рм╕рм░୍рммିрмЩ୍рмЧ рмХрм░୍рмормЪାрм░ୀрмЩ୍рмХ DA рмЕрмиୁрмкାрмдрм░େ рмжେрнЯ।
- рмПрмХрмоୁрм╢୍рмд рмкେрмоେрмг୍рмЯ: рмоାрм╕ିрмХ рмк୍рм░ାрмк୍рмдିрм░ рнзрнж% рмоିрм│ିрмм рмк୍рм░рмдି **рнм рмоାрм╕рм░ рм╕େрммା** рмкрм░େ।
ЁЯТ╝ рмкେрми୍рм╕рми рмХрм░୍рмкрм╕ рм░ୂрмк
- рмм୍рнЯрмХ୍рмдିрмЧрмд рмХрм░୍рмкрм╕: рмХрм░୍рмормЪାрм░ୀ рмдрм░рмлрм░ୁ рнзрнж% + рм╕рмоାрми рм░ାрм╢ି рм╕рм░рмХାрм░ рмж୍рн▒ାрм░ା।
- рмкୁрм▓୍ рмХрм░୍рмкрм╕: **рмЕрмдିрм░ିрмХ୍рмд рно.рнл%** рм╕рм░рмХାрм░ୀ рмЕଂрм╢рмжାрми **рмкେрми୍рм╕рми рмиିрм╢୍рмЪିрмд рмХрм░ିрммାрмХୁ**।
ЁЯУЕ рмк୍рм░рмнାрммрм╢ାрм│ୀ рмдାрм░ିрмЦ (Effective Date)
**рмПрмХୀрмХୃрмд рмкେрми୍рм╕рми рмпୋрмЬрмиା** рмПрмк୍рм░ିрм▓ рнз, рнирнжрнирнл рм░ୁ рм▓ାрмЧୁ рм╣େрмм।
ЁЯУК рмПрмХୀрмХୃрмд рмкେрми୍рм╕рми рмпୋрмЬрмиା рммାрммрмж рмЙрмжାрм╣рм░рмг
рм╕ଂрмХ୍рм╖ିрмк୍рмд рм░ୂрмк (Abbreviations) рмЖрм▓ୋрмЪрмиା:
- P: рмЕрммрм╕рм░ рмкାрмЗрммା рмкୂрм░୍рммрм░ୁ рмк୍рм░рмдିрм╖୍рмаିрмд рнзрни рмоାрм╕ рмормз୍рнЯрм░େ рмоାрмз୍рнЯрмо рмоୂрм│ рммେрмдрми।
- Q: рмкାрмд୍рм░рмдାрм╕рмо୍рмкрми୍рми рмЪାрмХିрм░ି рмоାрм╕рм░ рм╕ଂрмЦ୍рнЯା।
- IC: рмХрм░୍рмормЪାрм░ୀрмЩ୍рмХ рмж୍рн▒ାрм░ା рм╕ଂрмЧ୍рм░рм╣ рм╣ୋрмЗрмеିрммା рмм୍рнЯрмХ୍рмдିрмЧрмд рмХрм░୍рмкрм╕ рмоୂрм▓୍рнЯ।
- BC: рмк୍рм░рмжрмд୍рмд рмкେрми୍рм╕рми рмжେрммା рмиିрм░୍рмж୍рмзାрм░ିрмд рмм୍рнЯାрми୍рмЪрмоାрм░୍рмХ рмХрм░୍рмкрм╕ рмоୂрм▓୍рнЯ।
- DR: рморм╣рмЩ୍рмЧାрмЗ рмнрмд୍рмдା, рмпୋрмЧ୍рнЯ рмЕрмпୋрмЧ୍рнЯ рмжେрмЦି рммୃрмж୍рмзି рмХрм░ାрмпାрмП।
рмЙрмжାрм╣рм░рмг рмнିрмдрм░ୁ рмХିрмЫି рм╕୍рмеିрмдି:
рмЙрмжାрм╣рм░рмг 1: рмХрм░୍рмормЪାрм░ୀ рнирнл+ рммрм░୍рм╖ рмЪାрмХିрм░ି рмкୂрм░୍рмг୍рмг рмХрм░ିрмЫрми୍рмдି рмПрммଂ рм╕рморм╕୍рмд рм╢рм░рмд рмкୂрм░୍рмг୍рмг рмХрм░ିрмЫрми୍рмдି।
| рмкାрм░ାрмоିрмЯрм░ | рмоୂрм▓୍рнЯ |
|---|---|
| рмоାрмз୍рнЯрмо рммେрмдрми (P) | ₹45,000 |
| рмкାрмд୍рм░рмдାрм╕рмо୍рмкрми୍рми рмЪାрмХିрм░ି (Q) | 300 months |
| рмм୍рнЯрмХ୍рмдିрмЧрмд рмХрм░୍рмкрм╕ (IC) | ₹50,00,000 |
| рмм୍рнЯାрми୍рмЪрмоାрм░୍рмХ рмХрм░୍рмкрм╕ (BC) | ₹50,00,000 |
| рмк୍рм░рмжрмд୍рмд рмоାрмирмжрмг୍рмб | (P / 2) × (Q / 300) × (IC / BC) |
| рмЕрмиୁрмоାрмиିрмд рмкେрми୍рм╕рми рмжେрнЯ | ₹22,500 + DR |
рмЙрмжାрм╣рм░рмг 2: рмХрм░୍рмормЪାрм░ୀрмЩ୍рмХ рнзрнл рммрм░୍рм╖рм░ рм╕େрммା рмЕрмЫି।
| рмкାрм░ାрмоିрмЯрм░ | рмоୂрм▓୍рнЯ |
|---|---|
| рмкାрмд୍рм░рмдାрм╕рмо୍рмкрми୍рми рмЪାрмХିрм░ି (Q) | 180 months |
| рмм୍рнЯрмХ୍рмдିрмЧрмд рмХрм░୍рмкрм╕ (IC) | ₹30,00,000 |
| рмм୍рнЯାрми୍рмЪрмоାрм░୍рмХ рмХрм░୍рмкрм╕ (BC) | ₹30,00,000 |
| рмЕрмиୁрмоାрмиିрмд рмкେрми୍рм╕рми рмжେрнЯ | ₹13,500 + DR |
рмЙрмжାрм╣рм░рмг 3: рмХрм░୍рмормЪାрм░ୀрмЩ୍рмХ рнзрнж рммрм░୍рм╖рм░ рм╕େрммା рмЕрмЫି।
| рмкାрм░ାрмоିрмЯрм░ | рмоୂрм▓୍рнЯ |
|---|---|
| рмкାрмд୍рм░рмдାрм╕рмо୍рмкрми୍рми рмЪାрмХିрм░ି (Q) | 120 months |
| рмм୍рнЯрмХ୍рмдିрмЧрмд рмХрм░୍рмкрм╕ (IC) | ₹25,00,000 |
| рмм୍рнЯାрми୍рмЪрмоାрм░୍рмХ рмХрм░୍рмкрм╕ (BC) | ₹25,00,000 |
| рмЕрмиୁрмоାрмиିрмд рмкେрми୍рм╕рми рмжେрнЯ | ₹10,000 + DR (рми୍рнЯূрмирмдрмо рмЧ୍рнЯାрм░ାрмг୍рмЯି) |
рмоୁрмЦ୍рнЯ рмЬрмгାрм╕ୁрмгା:
- рмжୀрм░୍рмШ рм╕େрммା рмХрм░ିрмеିрммା рмХрм░୍рмормЪାрм░ୀ рмЕрмзିрмХ рмкେрми୍рм╕рми рмЕрмнିрмХ୍рм╖ିрмд рмХрм░ିрмкାрм░ିрммେ।
- рмЕрмЮ୍рмЪрм│рм╕рмо୍рммрми୍рмзୀрнЯ рмЕрммрм▓рмо୍рммрми рмж୍рн▒ାрм░ା рмкେрми୍рм╕рми рмк୍рм░рмнାрммିрмд рм╣େрмм।
- рмиିрммେрм╢ рм░ୂрмкрм░େ рмХрм░୍рмормЪାрм░ୀ рмХрм░୍рмкрм╕ рмоୂрм▓୍рнЯ рммୃрмж୍рмзି рмХрм░ିрмкାрм░ିрммେ।
ЁЯТ░ рмПрмХрмоୁрм╢୍рмд рмкେрмоେрмг୍рмЯ рмЧрмгрмиା (Lump Sum Payment Calculation)
**рмЕрммрм╕рм░, рм╕୍рм╡େрмЪ୍рмЫିрмХ рмЕрммрм╕рм░, рмХିрмо୍рммା FR 56(j) рмЕрми୍рмдрм░୍рмЧрмд рмЕрммрм╕рм░** рм╕рморнЯрм░େ, рмХрм░୍рмормЪାрм░ୀрмЩ୍рмХୁ рм╕େрммା рммୃрмд୍рмдିрмХୁ рмоାрмз୍рнЯрмо рмХрм░ି **рмПрмХрмоୁрм╢୍рмд рмкେрмоେрмг୍рмЯ** рмжିрмЖрмпାрмЗрмеାрмП। рмПрм╣ା **рмкୂрм░୍рмг୍рмг рммେрмдрмирм░ рнз/рнзрнж** рмПрммଂ **рм╕рмормкୂрм░୍рмг୍рмг рмЫрмЕ-рмоାрм╕ рм╕େрммା рммрм░୍рм╖** рмЙрмкрм░ି рмЖрмзାрм░ିрмд।
рм╕ୂрмд୍рм░:
рмПрмХрмоୁрм╢୍рмд рм░ାрм╢ି = (рмк୍рм░ାрмк୍рмд рммେрмдрмирм░ рнз/рнзрнж) × L
рмПрмаି **L** рм░ୁ **рм╕େрммା рммрм░୍рм╖рм░ рм╕рмормкୂрм░୍рмг୍рмг рмЫрмЕ-рмоାрм╕ рмЕрммрмзି** рмЙрмж୍рмзୃрмд।
| рмпୋрмЧ୍рнЯ рм╕େрммା рмЕрммрмзି | рм╕рмормкୂрм░୍рмг୍рмг рмЫрмЕ-рмоାрм╕ рмЕрммрмзି (L) | рмПрмХрмоୁрм╢୍рмд рм░ାрм╢ି (₹) |
|---|---|---|
| рнзрнж рммрм░୍рм╖ (рнзрнирнж рмоାрм╕) | 20 | ₹1,37,700 |
| рнзрнл рммрм░୍рм╖ (рнзрнорнж рмоାрм╕) | 30 | ₹2,06,550 |
| рнирнж рммрм░୍рм╖ (рнирнкрнж рмоାрм╕) | 40 | ₹2,75,400 |
| рнирнл рммрм░୍рм╖ (рнйрнжрнж рмоାрм╕) | 50 | ₹3,44,250 |
| рнйрнж рммрм░୍рм╖ (рнйрнмрнж рмоାрм╕) | 60 | ₹4,13,100 |
| рнйрнл рммрм░୍рм╖ (рнкрнирнж рмоାрм╕) | 70 | ₹4,81,950 |
рмЯିрмк୍рмкрмгୀ: **рнзрнж рммрм░୍рм╖ (рнзрнирнж рмоାрм╕) рмХрмо рм╕େрммା** рм╣େрм▓େ **рмПрмХрмоୁрм╢୍рмд рмкେрмоେрмг୍рмЯ рмжେрнЯ рмиାрм╣ିଁ**।
ЁЯФН Difference Between NPS & UPS
| Factor | National Pension System (NPS) | Unified Pension Scheme (UPS) |
|---|---|---|
| Eligibility | Applicable to Central Government employees (mandatory for those joining after 2004). | Applicable only to employees who opt for UPS under NPS. |
| Pension Structure | Market-linked pension depending on corpus growth. | Fixed assured payout linked to last drawn basic pay. |
| Corpus Contribution | 10% from employee, 14% by government. | 10% employee + 10% govt matching + additional 8.5% govt corpus. |
| Investment Control | Employee chooses investment options regulated by PFRDA. | Investment in individual corpus by employee; pool corpus managed by government. |
| Withdrawal Flexibility | Partial withdrawal allowed (up to 25% of contribution for specific needs). | Strict framework with limited withdrawal options. |
| Pension Amount Calculation | Based on annuity chosen & market performance. | Guaranteed pension based on last 12-month avg basic pay. |
| Minimum Pension Guarantee | No guaranteed minimum pension. | Minimum ₹10,000/month after 10 years of service. |
| Family Pension | Depends on annuity plan selected. | 60% of pension guaranteed to spouse after death. |
| Dearness Relief (DR) | Not applicable; pension is market-dependent. | Applicable & linked to serving employee DA. |
| Finality of Choice | Employee remains under NPS unless opting for annuity-based pension. | Once opted, UPS is **final & irreversible**. |
❓ Frequently Asked Questions
Q1. Who can opt for the Unified Pension Scheme?
A: Central Government employees under NPS who are in service on or after April 1, 2025.
Q2. What is the minimum pension amount assured?
A: ₹10,000 per month after 10 years of qualifying service.
Q3. Will Dearness Relief (DR) be applicable?
A: Yes. DR is applicable and calculated like DA for serving employees.
Q4. Can I switch back to standard NPS after opting UPS?
A: No. Once opted, the Unified Pension Scheme is final and irreversible.
Q5. Is this applicable to employees who retire before April 2025?
A: Yes, subject to conditions. Past retirees may get arrears and interest.
For more details, refer to the official Government notification: Download Unified Pension 2025 Notification.