UPS Scheme: Government Employees to Get Assured Monthly Pension, Know How to Switch from NPS

The central government has introduced a major reform in retirement benefits for its employees. The Unified Pension Scheme (UPS), officially notified and effective from April 1, 2025, provides a guaranteed monthly pension to eligible central government employees. Unlike the National Pension System (NPS), which is linked to market performance, UPS ensures financial stability after retirement with a fixed minimum pension.

What is the UPS Scheme?

The UPS is a fund-based pension system, where both the employee and the central government contribute every month. Upon retirement, the employee becomes entitled to receive a regular pension. The highlight of this scheme is the assurance of a minimum monthly pension of ₹10,000, provided the employee has served for at least 10 years in government service. This makes UPS a secure option for those who wish to avoid the uncertainties of market-driven returns under NPS.

Key Differences Between UPS and NPS

• Market Dependency: NPS investments are linked to stocks, bonds, and other market instruments, making returns unpredictable. In contrast, UPS provides a guaranteed pension irrespective of market fluctuations.

• Pension Calculation: In NPS, pension depends on the retirement corpus accumulated and prevailing annuity rates. In UPS, pension is directly linked to the last drawn salary, ensuring a more predictable retirement income.

• Assurance: UPS guarantees a minimum of ₹10,000 per month, while NPS does not offer any such floor.

Who Can Opt for UPS?

The UPS is available only for central government employees who were appointed on or after January 1, 2004, and are currently enrolled under NPS. However, certain categories such as railway employees, daily wage staff, casual workers, All India Services officers, and contractual staff are not eligible for UPS.

• Existing Employees: They must exercise their option to switch to UPS by October 1, 2025.

• New Employees (joining after April 1, 2025): They need to select their pension option within 30 days of joining.

How to Switch from NPS to UPS Online

The government has made the process simple through the eNPS portal. Here’s the step-by-step guide:

Visit the eNPS portal.

Select the “NPS to UPS Migration” option.

Enter your PRAN number and date of birth.

Complete OTP verification.

Read and accept the declaration, then e-Sign the form.

Authenticate using Aadhaar number/VID and OTP.

Upon successful submission, you will receive an Acknowledgement Number and can download the confirmation form.

⚠️ Important: Once you opt for UPS, the decision is irreversible.

Offline Application Option

Employees who prefer offline mode can fill Form A2. The process involves:

• Submitting the form to the Head of Office for verification.

• Forwarding through DDO → PAO/CDDO → CRA.

• PRAN allocation and first contribution within 20 days of approval.

Why UPS Matters for Employees

The UPS brings much-needed financial security for government employees worried about the volatility of NPS returns. By ensuring a guaranteed pension every month, it provides peace of mind and stability during retirement. This move is especially significant as many employees had raised concerns about the unpredictability of their future under a market-linked system.

With UPS, the government aims to restore confidence and address long-standing demands for a defined benefit pension system. For thousands of employees approaching retirement, this marks a crucial step towards financial independence and security.