NPS vs UPS Benefits: The Finance Ministry has recently decided that those who have opted for the newly launched Unified Pension Scheme (UPS) can now leave it for once and go to the National Pension System (NPS). This option will be available only once and in one direction, that is, one can switch from UPS to NPS, but cannot return.
The government has decided to give UPS as an option to the central government employees from April 1, 2025. The purpose of UPS is to provide a guaranteed monthly pension after retirement. As of July 20, 2025, about 31,555 employees have adopted this scheme. The last date to join this scheme is September 30, 2025.
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The Finance Ministry said this
The Office Memorandum issued by the Finance Ministry states that those who have opted for UPS can go to NPS later if they want. But this decision has to be taken at least one year before the date of retirement. If someone wants to take voluntary retirement, then this option can be exercised only three months before the estimated retirement date.
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What are the benefits of UPS?
Employees taking UPS will get the benefit of retirement gratuity and death gratuity. Apart from this, if an employee dies or becomes seriously disabled during service, they will also get the right to get benefits under CCS (Pension) Rules 2021 or CCS (Extraordinary Pension) Rules 2023. Also, the UPS scheme will get the benefit of tax exemption like NPS under the Income Tax Act, 1961.