Good news for central government employees. The Pension Fund Regulatory and Development Authority (PFRDA) has rolled out guidelines for the Unified Pension Scheme (UPS), set to launch on April 1 as an alternative for Central Government employees currently under the New Pension Scheme (NPS). Under these new guidelines, both current and retired employees must choose to switch to UPS within three months starting from April 1.
Once the choice is made, it cannot be altered. Eligible employees will need to complete and submit an online form found on the Prote CRA website. For those who start their service after April 1, 2025, they will have 30 days from their joining date to decide between UPS and NPS. The government may also extend this deadline for new hires. The central government announced the implementation of UPS in January 2024 as part of reforms aimed at ensuring a 50% pension post-retirement under NPS. Employees who opt out of UPS can continue with NPS.
Government employees now have the option to select between UPS and NPS
This new initiative allows employees to choose between the Unified Pension System (UPS) and the National Pension System (NPS), benefiting around 2.3 million government workers. The NPS was introduced on January 1, 2004, while the Union Cabinet approved the UPS on August 24, 2024. Previously, the Old Pension Scheme (OPS) provided employees with a pension equal to 50% of their last basic salary.
Who is eligible to enroll?
According to the Central Government’s rules, three categories of employees can enroll: existing employees who are part of the NPS until April 1, 2025; newly recruited employees who join the Central Government on or after April 1, 2025; and retired employees who were previously under NPS and either retired by March 31, 2025, took voluntary retirement, or retired under Fundamental Rule 56 (j). Additionally, if a subscriber passes away before enrollment, their legal spouse can still join the UPS scheme.
How to Sign Up?
Registration for the Unified Pension System (UPS) for central government employees will commence on April 1, 2025. Eligible employees can apply online via the Protean CRA portal (https://npscra.nsdl.co.in) or submit their application in person using a physical form.
What distinguishes UPS from NPS?
1. UPS is a pension scheme where employees contribute 10% of their basic salary plus dearness allowance (DA).
2. The government (employer) contributes 18.5% to the scheme.
3. The pension amount is influenced by the returns on market investments, primarily in government bonds.