Unified Pension Scheme (UPS)
Why it Matters?
The Finance Ministry has allowed a one-time, one-way switch from the Unified Pension Scheme (UPS) to the National Pension System (NPS). UPS, introduced in April 2025, assures fixed payouts for central government employees.
What You Should Know?
The Unified Pension Scheme (UPS) was introduced by the Government of India in April 2024.
It applies to Central government employees joining service on or after April 1, 2024.
UPS was introduced as an option under the National Pension System (NPS).
It guarantees 50% of the last drawn basic pay as pension at retirement.
It ensures family pension benefits and Dearness Relief (DR) to retirees.
Employees contribute 10% of salary (Basic + DA) to UPS.
The government contributes 18.5% of salary.
Pension is funded through a Pension Corpus Fund, managed by a government-designated authority.
UPS is designed to provide assured, inflation-indexed payouts, unlike NPS which is market-linked.
It also has provisions for gratuity and commutation of pension.