Major Pension Reform: Gratuity Becomes Mandatory for All UPS Government Employees

There is great good news for the Central Employees! Now all the Government Employees covered under the Unified Pension Scheme (UPS) will get the benefits of retirement and death gratuity under the Old Pension Scheme (OPS). This announcement has been made by Union Minister of State Dr. Jitendra Singh, which has given great relief to lakhs of employees.

Central Government employees coming under UPS will now be eligible for retirement and death gratuity benefits as per the provisions of the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021. This step meets an important demand of the employees and brings parity in retirement benefits. This new provision reflects the government’s commitment to ensure social security for all categories of employees under the National Pension System (NPS).

UPS now has a facility like OPS

Under the new rules, now the central government employees included in UPS will also be eligible for the benefit of gratuity as per the Central Civil Services Rules, 2021. Earlier this benefit was available only to employees with OPS. According to the Ministry of Personnel, in case of death, disability, or invalidity of the employee during service, now UPS employees will also be able to get benefits similar to OPS. For this, they will have to give an option in their service record. The Department of Pension has also issued a new order in this regard, which will give the employees of UPS the right to choose the benefits available under OPS.

Benefits of Retirement Gratuity and Death Gratuity

The Department of Financial Services, Ministry of Finance, vide its Notification dated 24.01.2025, had notified UPS as an option under NPS for new employees in the Central Government Civil Services from the effective date of 01.04.2025. In this, the Central employees covered under NPS were given a one-time option to join UPS.

In light of the above, the Department of Pension and Pensioners Welfare, vide its Office Memorandum dated 18.06.2025 has clarified that the Central employees opting for UPS will be eligible for the benefit of ‘Retirement Gratuity and Death Gratuity’ under the provisions of the Central Civil Services Rules, 2021.