The Pension Fund Regulatory and Development Authority (PFRDA) issued the gazette notification of the Unified Pension Scheme (UPS) on March 20, 2025. UPS was first announced on August 24, 2024, and with this gazette notification, its detailed rules and regulations are notified, which will be effective from April 1, 2025.
The scheme is currently for central government employees. State governments have the freedom to adopt it for their employees. UPS assures a minimum pension of Rs 10,000 and a maximum of 50 per cent of the average salary in the last 12 months of working before superannuation.
A central government employee can opt for UPS effective from April 1, 2025, per the notification. The eligible employees include:
• The existing employees are covered under the National Pension System (NPS)
• Recruits joining service on or after April 1, 2025
• Superannuated or voluntarily retired employees or those who have retired under Fundamental Rules 56(j) until March 31, 2025. Rules 56(j) refers to retirement which is not treated as a penalty under Central Civil Services (Classification, Control, and Appeal) Rules, 1965)
• Legally wedded spouse of a deceased subscriber
One can find the forms to apply for the UPS on the official website of the Protean Central Recordkeeping Agency (CRA). There are four forms for each of the category:
• For existing employees – Form A2
• For a new recruit – Form A1
• For a person superannuated under Fundamental Rules 56(j) – Form B2
• In case of a deceased employee – Form B6
These forms may be submitted online or offline to the Drawing and Disbursing Officer (DDO).
What Is The Deadline To Opt For UPS?
As per the notification, the eligible employees can opt for UPS "within three months from 1st April 2025, or within such extended timelines if any, allowed by the Central Government" to all eligible subscribers except the deceased subscriber cases.
It adds, “The option once exercised shall be final and irrevocable”.
Choice Of Investment:
Like NPS, subscribers of UPS will also have the choice to select their pension fund and investment pattern.
• They can choose the default pattern of the pension funds registered with the authority. If no option is selected, the default pattern will be deemed as selected and will apply.
There are three more options other than the default options. These are:
• Scheme G: 100 per cent investment in government securities
• LC-25: Conservative life cycle fund with equity capping at 25 per cent
• LC-50: Moderate life cycle fund with equity capping at 50 per cent
However, subscribers can change their investment choices every year. They are allowed to change their pension fund once and investment choice twice in a year, per the notification.
Under the UPS, the subscribers will get an assured pension which was not available in the NPS. UPS is a mix of the old pension scheme (OPS) and the NPS, as it offers a guaranteed pension as in OPS but it is contributory like NPS. While employee contribution remains at 10 per cent, the same as in NPS, employer (government) contribution is higher (18.5 per cent) in UPS compared to 14 per cent in NPS. As per the government data, around 23 lakh subscribers will benefit from this pension option.
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