UPS-NPS: The Unified Pension Scheme (UPS) is set to launch on April 1, offering a guaranteed pension for central government employees. Both current and new employees can apply for this pension scheme through online or offline methods. A key feature of the application process is that employees will need to select their preferred registered pension fund and investment strategy to ensure their contributions are invested wisely for optimal returns. This approach is similar to the National Pension Scheme (NPS).
Here’s how the contribution structure will work:
1. Personal Deposit Fund: Employees will contribute 10% of their salary to this fund, matched by a 10% contribution from the government. Pension funds will manage this money.
2. Pool Deposit Fund: The government will add an extra 8.5% to this fund, which will be invested in government schemes.
Investment choices within individual funds:
– Employees opting for UPS can select their investment strategy similar to the NPS and must choose a registered pension fund.
This means members can invest their personal contributions in any investment scheme approved by the pension regulator, PFRD. The benefits will go directly to the employee.
If an employee doesn’t select an investment plan, their funds will automatically default to the standard option, where investments will be made according to the plans set by PFDRD.
Choosing a registered pension fund opens up various investment options:
1. The entire fund can be allocated to government securities, or
2. Members can choose from life-cycle based plans:
– Conservative Fund: Limits equity investment to a maximum of 25%.
– Moderate Fund: Allows equity investment up to 50%.
Partial withdrawals are also allowed. After three years of joining UPS, members can withdraw up to 25% of their contributions.
You can only select one pension plan. The government allows both current and new employees to choose between the NPS and UPS. Employees can either opt for UPS under NPS or stick with NPS without the UPS option. Once you make your choice, it’s final.
Here’s what you need to know about the forms to fill out:
1. Current employees: If you joined government service after January 1, 2004, and are enrolled in NPS, you can choose UPS by filling out Form A2.
2. New hires: Employees starting on or after April 1, 2025, can also select this option by completing Form A1.
3. Retirees: If you’ve retired and were part of NPS, you can join UPS by submitting Form B2 along with your KYC documents.
4. In the event of an employee’s death: The legally married spouse must submit Form B6 along with KYC documents.
Here’s how to apply online to switch from NPS to UPS:
1. Start by visiting https://enps.nsdl.com/eNPS/NationalPensionSystem.html. Click on the NPS To UPS Migration option under the Unified Pension Scheme menu.
2. Enter your PRAN and date of birth, then verify by entering the captcha. An OTP will be sent to your registered mobile number; enter that to proceed.
3. A new declaration window will pop up. Read it, agree to the terms, and click on the Proceed to e-Sign option.
4. Complete the e-Sign verification by entering your Virtual ID (VID – a 16-digit number) or Aadhaar details.
5. Once your verification is successful, your transfer request will be registered, and you’ll receive an acknowledgment number.
If you prefer to apply offline:
– Eligible employees need to submit the relevant forms (A1, A2, & B2) to their office (DDO or PAO) or the designated Nodal Office.
– The DDO will review the forms based on the employee’s service record and complete the request process through the CRA transaction website.