New Delhi: The Pension Fund Regulatory and Development Authority (PFRDA) on Thursday issued a notification bringing into effect the Unified Pension Scheme (UPS).
Under the scheme, there is a provision to give 50 percent of the average basic salary received in the 12 months before retirement as a guaranteed pension. This notification follows the UPS notification issued by the government on January 24, 2025 for central government employees covered under the National Pension System (NPS).
UPS rules will be applicable from 1 April
PFRDA said in a statement that the rules related to UPS will come into force from April 1, 2025. These rules enable the enrollment of Central Government employees, including employees coming under NPS of existing Central Government in service as on April 1, 2025 and employees recruited in Central Government services on or after April 2025. The enrollment and claim forms for all these categories of Central Government employees will be available online on the website of Protein CRA from April 1, 2025.
Employees also have the option of submitting the form physically. According to the notification, the UPS or assured pay option will not be available in case the employee is removed or terminated from service or resigns. The notification said the rate of full assured pay will be 50 per cent of the average basic pay of 12 months immediately preceding retirement and subject to a minimum qualifying service of 25 years.
There will be an option to choose UPS and NPS
The notification will give 23 lakh government employees the option to choose between UPS and NPS. NPS came into effect on January 1, 2004. The Union Cabinet had approved the introduction of UPS on August 24, 2024. Under the Old Pension Scheme (OPS) effective before January 2004, employees used to get 50 per cent of their last basic salary of their tenure as pension.
Unlike OPS, UPS is contributory in nature. Employees have to contribute 10 per cent of their basic salary and dearness allowance, while the employer (central government) contributes 18.5 per cent. However, the final payout depends on the market returns on the funds, which are mostly invested in government bonds.
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