Retirement is a stage where financial stability matters the most. The Unified Pension Scheme (UPS) 2025, introduced by the Government of India, is designed to ensure central government employees can retire with dignity and security. Announced on August 24, 2024, and set to take effect from April 1, 2025, the scheme is a significant shift from the market-based National Pension System (NPS). With guaranteed payouts and inflation protection, UPS marks a new chapter in India’s pension structure.
A Step Towards Stability
Unlike NPS which depends on market performance, UPS offers fixed and predictable pensions. This scheme is expected to directly benefit 23 lakh central government employees, and its scope could grow to nearly 90 lakh if adopted by state governments. Approved by the Union Cabinet under the leadership of Prime Minister Narendra Modi, UPS reflects a strong commitment to employee welfare.
Key Features of UPS 2025
UPS 2025 is built to provide more benefits compared to NPS. Below is a quick comparison:
| Feature | NPS | UPS 2025 |
|---|---|---|
| Employee Contribution | 10% of Basic Pay + DA | 10% of Basic Pay + DA |
| Government Contribution | 14% | 18.5% |
| Pension Type | Market-linked | Fixed, Guaranteed |
| Minimum Service for Pension | 10 years | 10 years |
| Minimum Pension Amount | Depends on fund | 10,000 per month |
| Pension After 25 Years Service | Not fixed | 50% of last 12 months’ average basic pay |
Family and Inflation Coverage
UPS is designed to support not just employees but also their families. In case of the employee’s death, the spouse will receive 60% of the pension as family pension. Additionally, pensions will be adjusted with Dearness Relief (DR) to safeguard against inflation, ensuring that retirees and their families maintain a steady standard of living.
Flexible Enrollment and Payouts
- Central government employees in service before April 1, 2025, can switch to UPS, but once enrolled, they cannot return to NPS.
- New employees joining after April 1, 2025, will have 30 days to choose their option.
- The final deadline for existing employees to switch is September 30, 2025.
- At retirement, employees will also get a lump sum payout calculated as one-tenth of their monthly salary for every six months of service, in addition to gratuity, without reducing the guaranteed pension.
How to Apply for UPS
Switching to UPS is simple. Employees need to visit the Protean CRA portal (npscra.nsdl.co.in) and choose the UPS option.
- Form A1 is used for new participants
- Form A2 is used for existing NPS members
This process ensures an easy and smooth transition from NPS to UPS.
Toward Viksit Bharat 2047
UPS 2025 brings together the stability of the Old Pension Scheme and the contributory nature of NPS. With states like Maharashtra already showing interest, it has the potential to reach millions more. By ensuring financial security post-retirement, UPS stands as a key pillar in the journey toward a developed India by 2047.