UPS i.e. Unified Pension Scheme has been started by the government from 1 April 2025. In this, employees get fixed pension after retirement. NPS is a market-linked scheme, in which your pension corpus increases according to performance.
If you are a Central Government Employee and are thinking about the money you will get after retirement, then this news is important for you. The government has made a big announcement which can change the entire plan of your pension fund. The government has made it clear that now employees will get a chance only once to move out of the Unified Pension Scheme and shift to the National Pension System.
One time chance, no return
The Finance Ministry has clearly stated in its notification that this facility will be available only once and one-way. That is, if an employee switches from UPS to NPS, he will not be able to go back to UPS. This option is only for those employees who have already opted for UPS.
When can we take this decision?
Employees can avail this switching option up to one year before their retirement date. If an employee takes voluntary retirement, he can get this option up to three months before retirement. But employees who are facing disciplinary action or who are being removed from the job will not be eligible for this facility.
What is the difference between UPS and NPS?
UPS i.e. Unified Pension Scheme has been started by the government from 1 April 2025. In this, employees get fixed pension after retirement. On the other hand, NPS is a market-linked scheme, in which your pension corpus increases according to performance. Now the government has given this opportunity to the employees that if they want a market-linked retirement fund, then they can leave UPS and go to NPS.
Government contribution and benefits
If an employee leaves UPS and joins NPS, he will also get the government’s 4% additional contribution under UPS in the NPS corpus. Also, like NPS, UPS has also been given tax benefits. Apart from this, employees choosing UPS will also get the benefit of retirement gratuity and death gratuity.
If an employee dies or becomes disabled during the job, he will get benefits under CCS Pension Rules 2021 or Extraordinary Pension Rules 2023.
How many employees have joined UPS till now?
According to the government, as of July 20, 31,555 employees have opted for UPS. Out of these, 7,253 claims have been received, and 4,978 claims have been paid. At the same time, 25,756 retired employees are likely to get the benefit of additional UPS benefits.
Last date to switch from NPS to UPS
The deadline to switch from NPS to UPS was earlier 30 June 2025, but now it has been extended to 30 September 2025. This means that employees now have time till 30 September to switch to UPS, and UPS employees will have a one-time opportunity to switch to NPS.
It is clear from this decision that the government wants to give more flexibility to the employees. Now the employees will be able to decide for themselves whether they want to choose the assured pension route or the market-linked NPS, which can give higher returns in the long term.
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