There is a major update for central government employees. The Pension Fund Regulatory and Development Authority (PFRDA) announced on Thursday that the Unified Pension Scheme (UPS) is now in effect. This scheme guarantees a pension equal to 50% of the average basic salary earned in the last 12 months before retirement. This announcement follows the government’s earlier notification regarding the UPS for central government employees under the National Pension System (NPS) issued on January 24, 2025.
The UPS rules will take effect on April 1, 2025
According to PFRDA, the UPS rules will be applicable starting April 1, 2025. These rules will allow enrollment for Central Government employees, including those already under the NPS as of that date, as well as new recruits joining Central Government services from April 2025 onward.
Central Government employees can access the enrollment and claim forms online on the Protein CRA website starting April 1, 2025. They also have the option to submit their forms in person. However, the notification states that the UPS or assured pay option will not be available if an employee is dismissed, terminated, or resigns. The full assured pay will be set at 50% of the average basic pay from the 12 months leading up to retirement, with a minimum qualifying service requirement of 25 years.
Employees will have the choice between UPS and NPS
This notification provides 2.3 million government employees the opportunity to select between UPS and NPS. The NPS was implemented on January 1, 2004, and the Union Cabinet approved the introduction of UPS on August 24, 2024. Under the Old Pension Scheme (OPS), which was in place before January 2004, employees received a pension amounting to 50% of their last basic salary during their service.
In contrast to OPS, UPS operates on a contributory basis. Employees are required to contribute 10% of their basic salary and dearness allowance, while the employer, which is the central government, contributes 18.5%. The total amount received at the end will depend on the market returns from the funds, primarily invested in government bonds.