Unified Pension Scheme: A major update has arrived regarding the Unified Pension Scheme (UPS) for central government employees. The Department of Pension and Pensioners’ Welfare (DoPPW) has clarified that if a government employee resigns from their job under the UPS, they will not receive the assured pension payout, or guaranteed pension, benefit under the scheme. However, the employee will be entitled to the pension amount deposited in their account. This amount will be paid to them in a lump sum.
What will happen if I resign?
The DoPPW issued an office memorandum on October 29, 2025, stating that employees who opt for the Unified Pension Scheme (UPS) implemented under the National Pension System (NPS) will not get guaranteed pension if they resign.
The memorandum states that if an employee resigns from government service or post, and his resignation is not withdrawn in the public interest, the assured payout under UPS will be forfeited.
What will happen to the deposited amount?
Although the guaranteed pension entitlement is lost, the employee will receive the full accumulated corpus deposited in their pension account. This amount will be paid in a lump sum, but the payment process will begin 90 days after the resignation, i.e., when the employee’s service is deemed to have ended and they are formally relieved.
What if death occurs within 90 days of resignation ?
If an employee dies within 90 days of resigning, the accumulated pension amount will be paid to his or her legal spouse. If there is no spouse, the amount will be paid to his or her legal heir.
What is Unified Pension Scheme (UPS)?
UPS is a new scheme implemented by the Central Government from April 1, 2025, and is offered as an alternative option under the NPS. It provides employees with an assured payout based on specified conditions, guaranteeing a fixed pension amount upon retirement. It also offers the flexibility of market-linked savings like the NPS. It blends traditional pensions and modern investments.
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