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Government Services

Unified Pension Scheme (UPS): Who Opted In and What Happens Now

UPS assures central staff 50% of average basic pay after 25 years. The opt-in window shut on 30 Nov 2025; a one-time switch back to NPS remains.

AI

Written by Ananya Iyer

Published 19 September 2026·6 min read

On this page8 sections
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The Unified Pension Scheme (UPS) assures central government employees 50% of their average basic pay after 25 years, with a ₹10,000 monthly minimum after 10 years. Existing staff and past retirees had until 30 November 2025 to opt in; new recruits still get 30 days from joining. Anyone in UPS can switch back to NPS once.

Key facts

Item Detail
In force from 1 April 2025, as an option under the National Pension System
Who could choose it Central government employees under NPS, new recruits, and NPS retirees who left on or before 31 March 2025
Opt-in deadline for existing staff and retirees 30 November 2025 (extended from 30 September 2025)
New recruits Within 30 days of joining
Employees who opted in 1,18,404 as of 19 July 2026, per the Finance Minister’s Lok Sabha reply
Assured payout 50% of the 12-month average basic pay before superannuation, after 25 years
Minimum payout ₹10,000 a month after at least 10 years of service
Family payout 60% of the payout drawn just before death, to the legally wedded spouse
Switch back to NPS Once only, at least 1 year before superannuation or 3 months before voluntary retirement

What UPS guarantees

UPS runs inside the NPS structure and is regulated by PFRDA. You still build a corpus, but the government assures a payout at retirement. The benefits, as listed by PFRDA:

ItemDetails
Assured payout50% of your average basic pay over the last 12 months before superannuation, if you have 25 years of qualifying service. Shorter service between 10 and 25 years gets a proportionate payout.
Dearness reliefpaid on the payout and the family payout, as notified by the government. PIB says it is linked to the All India Consumer Price Index for Industrial Workers, as DA is for serving staff.
Lump sum at retirementone-tenth of your last basic pay plus DA for every completed six months of qualifying service. It is paid on superannuation, voluntary retirement or retirement under FR 56(j), on top of gratuity.
Gratuityretirement and death gratuity under the CCS (Payment of Gratuity under NPS) Rules, 2021.

A worked example: an employee with 25 years’ service and a 12-month average basic pay of ₹80,000 gets an assured payout of ₹40,000 a month, plus dearness relief. With 50 completed six-month periods and a last basic pay plus DA of ₹1,40,000, the lump sum is 50 × ₹14,000 = ₹7,00,000. Our gratuity rules page explains the separate gratuity sum.

How the money goes in

Contribution NPS UPS
Employee 10% of basic pay + DA 10% of basic pay + DA
Government, to your account 14% 10%
Government, to a pooled corpus None About 8.5%
Assured payout No Yes, subject to conditions

At retirement you may withdraw up to 60% of your individual corpus or the benchmark corpus, whichever is lower. Doing so cuts the assured payout in proportion. Partial withdrawals of up to 25% of your own contributions are allowed three times in service, for purposes such as education, marriage, housing and medical needs.

A CBDT office memorandum dated 2 July 2025 applies the NPS tax provisions of the Income-tax Act, 1961, including Sections 80CCD and 10(12A), to UPS.

Eligibility and service thresholds

PFRDA lists four groups who could come under UPS:

  • Central government employees covered by NPS on 1 April 2025.
  • New recruits joining central government service on or after 1 April 2025.
  • NPS subscribers who superannuated or retired on or before 31 March 2025 with at least 10 years of qualifying service, including retirement under FR 56(j) other than as a penalty.
  • The legally wedded spouse of such a retiree who has died.

Ten years of qualifying service is the floor for any UPS payout. Past retirees who opted in get arrears with interest at PPF rates.

The closed opt-in window

Existing employees and past retirees had to submit their choice by 30 September 2025. On 30 September the Finance Ministry extended that to 30 November 2025. It cited recent changes, including the switch option, benefits on resignation and compulsory retirement, and tax exemptions. Existing NPS subscribers used Form A2 to opt in; new recruits use Form A1.

No further extension had been notified when we checked. If you were eligible and did not choose UPS, you continue under NPS by default. Our NPS guide covers how that scheme works.

New recruits are the exception. Anyone joining central government service now gets 30 days from joining to opt for UPS.

On 4 August 2026 Finance Minister Nirmala Sitharaman told the Lok Sabha that 1,18,404 employees had opted for UPS as of 19 July 2026. She added that no proposal to change or replace UPS was under consideration, as Business Today reported.

Switching back to NPS: rules

The Department of Pension and Pensioners’ Welfare notified the Central Civil Services (Implementation of the Unified Pension Scheme under the National Pension System) Rules, 2025 in the Gazette on 2 September 2025. They allow a one-time switch from UPS to NPS on these terms:

  1. You can switch only once, and you cannot return to UPS afterwards.
  2. Exercise it at least one year before superannuation, or at least three months before voluntary retirement.
  3. The switch is barred if you are removed, dismissed or compulsorily retired as a penalty, or if disciplinary proceedings are pending or contemplated.
  4. On switching, you get NPS benefits plus the differential 4% government contribution.
  5. If you do not switch in time, you stay in UPS.

Before deciding, compare the assured payout with an estimate of your NPS corpus. The NPS calculator gives a rough figure. A retirement planner or your pay and accounts office can help with a service-specific estimate.

Family pension and minimum pension

If a UPS pensioner dies, the legally wedded spouse receives 60% of the payout being drawn just before death, with dearness relief. For past retirees, the spouse must have been married to the retiree on the date of retirement.

The ₹10,000 minimum applies on superannuation after at least 10 years of qualifying service, and dearness relief is paid on it too.

Claims are filed on Forms B1 to B6, depending on your status. The pay and accounts office issues a UPS Payout Order and sends it to NPS Trust, which releases the benefit. PFRDA’s toll-free number for UPS queries is 1800 571 2930.

Frequently asked questions

What is the Unified Pension Scheme?

An option under NPS for central government employees, in force from 1 April 2025. It assures a payout of 50% of average basic pay after 25 years of service, a ₹10,000 minimum after 10 years, and a 60% family payout.

Can I still opt for UPS?

Only if you are a new recruit, within 30 days of joining. The window for existing employees and past retirees closed on 30 November 2025.

How many employees chose UPS?

1,18,404 as of 19 July 2026, according to the government’s reply in the Lok Sabha.

Can I go back to NPS after choosing UPS?

Yes, once. You must switch at least one year before superannuation or three months before voluntary retirement, and you cannot return to UPS.

Does UPS apply to state government employees?

The central scheme covers central government employees under NPS. States decide separately for their own staff, so check your state finance department’s orders.

Where is the UPS notification PDF?

PFRDA’s UPS page links the regulations, notifications and office memoranda. The service rules were published in the Gazette of India on 2 September 2025.

Sources

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