Frequently Asked Questions (FAQs) on the Unified Pension Scheme (UPS)

The Unified Pension Scheme (UPS) has been introduced as an option under the National Pension System (NPS) by the Central Government for the Central Government employees covered under NPS so that they may receive an assured payout after their retirement. It is a ‘fund-based’ payout system which relies on the regular and timely accumulation and investment of applicable contributions (from both the employee and the employer (the Central Government)) for grant of monthly payout to the retiree.

The Unified Pension Scheme will be operational from 1st April, 2025.

The Central Government employees, who are covered under NPS, are eligible to submit their option for UPS under National Pension System.

The rate of full assured payout will be @50% of 12 monthly average basic pay, immediately prior to superannuation. Full assured payout is payable after a minimum 25 years of qualifying service. In case of lesser qualifying service period, proportionate payout would be admissible. A minimum guaranteed payout of Rs. 10,000 per month shall be assured in case superannuation is after 10 years or more of qualifying service subject to timely and regular credit of contributions and no withdrawals. In cases of voluntary retirement after a minimum 25 years of qualifying service, assured payout will commence from the date on which the employee would have superannuated if he had continued in service.

A minimum assured payout of Rs.10,000 per month has been guaranteed under Unified Pension Scheme in case superannuation is after 10 years or more of qualifying service, subject to timely and regular credit of contributions and no withdrawals.

In case of death of the payout holder after superannuation, family payout @60% of the payout admissible to the payout holder immediately before his demise, shall be assured to the legally wedded spouse (spouse legally wedded as on the date of superannuation or on the date of voluntary retirement or retirement under FR 56(j), as may be applicable).

The Central Government employees, who are covered under NPS and who choose the option for UPS, are eligible to receive assured payout under UPS, as per the following criteria:

• On superannuation after completing a minimum of 10 years’ qualifying service, from the date of superannuation;
• In case of retirement under the provisions of FR 56 (j) (which is not a penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965) from the date of such retirement; and
• In case of voluntary retirement after a minimum qualifying service period of 25 years, from the date such employee would have superannuated, if the service period had continued to superannuation.

The option of assured payout under UPS shall not be available to the Central Government employees in the following circumstances:

• In case of an employee superannuating before qualifying service of 10 years, from the date of superannuation.
• In case of removal or dismissal from service or resignation of the employee.

Dearness Relief shall be available on the assured payout and family payout, as the case may be. The Dearness Relief will be worked out in the same manner as Dearness Allowance applicable to serving employees. Dearness Relief will be payable only when payout commences.

In cases of voluntary retirement after a minimum 25 years of qualifying service, assured payout shall commence from the date on which the employee would have superannuated if he had continued in service.

A lumpsum payment will be allowed on superannuation @10% of monthly emoluments (basic pay + Dearness Allowance) for every completed six months of qualifying service.

The contribution of employees will be 10% of (basic pay + Dearness Allowance). The matching Central Government contribution will also be 10% of (basic pay + Dearness Allowance). Both will be credited to each employee’s individual corpus.

A corpus value accrued through a default pattern of investment as defined by Pension Fund Regulatory and Development Authority (PFRDA) from time to time.

A ‘benchmark corpus’ value shall be computed, in such manner as may be determined by the PFRDA, with the following assumptions, namely:

• Regular contributions by the employees as well as the employer, as applicable under the scheme, are received for each month of qualifying service;
• In case of missing contributions, an appropriate value, to be determined by the PFRDA, shall be assigned; and
• Investment of such contributions shall be made as per the ‘default pattern’ of investment defined by the PFRDA.

• The employee can exercise investment choices for the individual corpus alone. Such investment choices shall be regulated by the PFRDA. A ‘default pattern’ of investment may be defined by PFRDA from time to time. If an employee does not exercise an investment choice on individual corpus, the ‘default pattern’ of investment will apply.
• The investment decisions for the pool corpus built through the additional Central Government contribution will solely rest with Central Government.

At superannuation/retirement, the employee under UPS shall authorise the transfer of the value or units in the individual corpus to the pool corpus, equivalent to the value or units of the benchmark corpus for authorisation of Assured Payout. In case the value or units of individual corpus is more than the value or units of the benchmark corpus, the employee shall authorize transfer of value/units equivalent of the benchmark corpus and the balance amount in the individual corpus will be credited to the employee.

At superannuation/retirement, the employee under UPS shall authorise transfer of the value or units in the individual corpus to the pool corpus, equivalent to the value or units of the benchmark corpus for authorization of assured payout. In case the value/units of individual corpus is less than value or units of the benchmark corpus, the employee shall have an option to arrange for additional contribution to meet this gap.

Yes. In case the qualifying service is less than 25 years, proportionate payout would be admissible on superannuation.

At superannuation/ retirement, the qualifying service of the employee under the UPS option, will be determined by the Head of Office, where he is employed.

In case an employee chooses the UPS option, all its stipulations and conditions shall be deemed to have been opted for and such option once exercised, shall be final.

The provisions of UPS will also be applicable, mutatis mutandis to past retirees of NPS, who have superannuated before the date of operationalizing of UPS.

Past retirees of NPS will be paid arrears for the past period along with interest as per Public Provident Fund (PPF) rates. The monthly top-up amount for such superannuated employees, as determined by the PFRDA, shall be paid after adjusting the withdrawals made by, and annuities paid to, them.

The value or units in the individual corpus with investment choices of the employee shall be informed to such employee on a periodic basis. Alongside, the value or units of the benchmark corpus corresponding to the employee, computed as per para 5 of the Notification on UPS dated 24.01.2025, will also be informed to the employee.