Central government employees can now switch to the newly launched Unified Pension Scheme (UPS) starting today, April 1. Currently, they are part of the National Pension Scheme (NPS), which is market-linked. Employees had been demanding a guaranteed pension scheme for a long time, and to address this, the government announced the UPS last year.

How to Switch to UPS

Central government employees can switch to the Unified Pension Scheme (UPS) by visiting the UPS migration page. They need to select UPS under the NPS options. Employees can migrate through the Protean CRA portal (npscra.nsdl.co.in), or they can submit physical forms.

Key Features of UPS

1. Structured Pension Payout Scheme

  • UPS is based on the employee’s service period.
  • Employees with 25 years or more of service will receive 50% of their average basic salary (of the last 12 months) as pension.
  • Employees with 10-25 years of service will receive a proportionate pension based on their service period.

2. Guaranteed Minimum Pension of Rs 10,000

  • Employees with at least 10 years of service will receive a guaranteed monthly pension of Rs 10,000.
  • Employees will contribute 10% of their basic salary (plus DA) to the pension fund, and the government will match this amount.
  • A total of 20% of their salary will be invested, managed by the government’s default pension scheme. Employees also have the option to invest with private pension fund managers.

3. Pension for the Family

  1. In the event of the pensioner’s death, the spouse will receive 60% of the pension.
  2. This ensures the family’s financial stability after the pensioner’s passing.
  3. On retirement, the employee will receive a pension from the deposited fund, similar to the systematic withdrawal plan of a mutual fund.
  4. If the fund is exhausted before the pensioner or spouse’s death, the pension will be paid from a common pool managed by the government.
  5. Note: Currently, UPS is available only for central government employees.