The Central Government of India is running multiple pension schemes to support the citizens of India. It is needless to say, why everyone needs to get pension during old age. Under UPS, there are several changes the finance ministry already issued, which will benefit the consumers. Government has extended the deadline to November 30, to chose between NPS and UPS. Which pension scheme will benefit you more, and what are changes the ministry has made? Let’s find out.
The Finance Ministry said in a statement, “Several positive changes have been announced recently under UPS, including switch option, benefits on resignation, compulsory retirement, tax exemptions, etc. Requests have been received from various stakeholders that in view of these changes, employees should be given some more time to exercise this option.”
Therefore, it has been decided to extend the deadline for existing employees, former retirees, and legally married spouses of deceased former retirees to opt for the UPS by two months—to November 30, 2025. The letter sent to PFRDA stated that the Finance Minister had approved this. However, based on various proposals received from stakeholders, this deadline was later extended to September 30, 2025, through a letter dated July 1, 2025.
What is UPS and What is NPS?
As of July 20, about 31,555 central government employees had opted for UPS. According to reports, about 1 lakh of the 23 lakh government employees have opted for UPS by the September 30 deadline. The government has introduced UPS as an option under the National Pension System (NPS) for central government employees from April 1, 2025. UPS will provide assured payouts to employees.
UPS is applicable to central government employees who are covered under the NPS and opt for this option under the NPS, which came into effect on January 1, 2004. The option to choose between UPS and NPS can be exercised by 23 lakh government employees.
On August 24, 2024, the Union Cabinet chaired by Prime Minister Narendra Modi approved the UPS.
Under the old pension scheme, which ended in January 2004, employees received 50 percent of their last drawn basic pay as pension. Unlike the OPS, the UPS is contributory in nature, with employees contributing 10 percent of their basic pay and dearness allowance, while the employer (central government) contributes 18.5 percent.