The Unified Pension Scheme (UPS) was implemented on April 1, 2025; however, it does not seem to have many takers yet. As the deadline to switch to the scheme is approaching, the Pension Fund Regulatory and Development Authority (PFRDA) is strengthening efforts to make the decision making easier and the process convenient. Aligning with this objective, the NPS Trust launched a UPS calculator on May 20, 2025, to help subscribers compare UPS with the National Pension System (NPS) and decide what could be better for them.
The calculator is available on the official website of the NPS Trust. A subscriber can easily use it by providing details like date of birth, date of joining, retirement age, basic pay, existing NPS corpus, if any, and expectation of annual growth in basic pay and dearness allowance (DA), return in investment, annuity rate and few other details like life expectancy, etc. This calculator compares both pension schemes (UPS and NPS) and makes it easy for anyone to check the estimated retirement corpus in both schemes.
Advertisement
UPS started with a lot of buzz, but so far, only around 10,000 of 27 lakh (2.7 million) central government employees have switched to UPS, as per a report by the Financial Express. The deadline to exercise the switching option is June 30, 2025. While half of the period has already passed since its implementation, less than 10 per cent of the eligible employees have registered for the scheme.
In April, Union finance minister Nirmala Sitharaman asked central government ministries and the department to sensitise employees about UPS and speed up the process. Reportedly, the government departments have given presentations to make employees aware of the features of UPS, the difference between UPS and NPS and the procedure to exercise switching.
Advertisement
Now with the UPS calculator, employees can get clarity and better understanding about how much their retirement corpus would become upon retirement.
Typically UPS queries are about its comparative benefits and operational procedures.
The calculator solves the comparative benefit queries. This can help employees select the pension option most suitable for them. The operational procedure is also simple and available both online and offline; however as the switching is irrevocable, it is extremely crucial to be aware of all the pros and cons of both the schemes and understand the suitability in the individual context.
Key Features Of UPS:
• Guaranteed pension of 50 per cent of the last 12 months average basic pay for employees who complete 25 years of service
Advertisement
• A minimum assured pension of Rs 10,000 after 10 years of service
• A guaranteed family pension equal to 60 percent of the last drawn pension by the subscriber
• Pension, including the assured pension, assured family pension, and assured minimum pension will be inflation-indexed
• At the time of superannuation, a lump-sum payment of one-tenth of the monthly payment (basic pay + DA) for every completed six months of service
• The government’s contribution is 18.5 per cent
• Unlike NPS, there is no choice of annuity in UPS
Advertisement
Key Features Of NPS:
• Different investment options with chances to earn more due to its market exposure
• Flexibility to increase or decrease equity exposure
• The government’s contribution is 14 per cent
• A mandatory annuity of 40 per cent of the corpus; however, it could be done for 100 per cent of the corpus as well basis subscriber’s choice
• Different annuity options to choose from, including return of purchase (RoP) price
• No assured pension
The choice is difficult because of its irreversible nature, but with the calculator, one can get clarity about the numbers, and taking into account other qualitative preferences, one can decide the suitable option.
