Central government employees under the National Pension System (NPS) have until 30 June 2025 to opt into the newly introduced Unified Pension Scheme (UPS). The UPS, officially effective from 1 April 2025, offers assured monthly payouts post-retirement, contrasting with the NPS’s existing provisions. The Ministry of Finance’s Department of Financial Services formalised this transition under Notification No. FS-1/3/2023-PR dated 24 January 2025. The scheme aims to provide enhanced retirement benefits, including retirement and death gratuity, in line with the Central Civil Service (Payment of Gratuity under NPS) Rules, 2021.
Eligible participants include all Central government employees currently enrolled in the NPS and in service as of 1 April 2025. The UPS guarantees a pension amounting to 50% of the average basic pay over the 12 months preceding retirement, provided the employee has served for a minimum of 25 years. Additionally, a minimum guaranteed pension of Rs 10,000 per month is assured for those retiring after at least 10 years of qualifying service. In the event of the subscriber’s death post-retirement, a family pension, amounting to 60% of the last pension, is payable to the surviving spouse. This ensures financial security for the family, offering peace of mind to employees.
The UPS also includes a dearness relief (DR) component and a lump sum benefit, calculated as 10% of emoluments for every completed six months of qualifying service, which will be paid upon superannuation. Employees can opt for this scheme online through the e-NPS portal by entering their Permanent Retirement Account Number (PRAN) and other relevant details. An offline option is available, requiring the submission of Form A2 to the nodal office. It’s crucial for employees to comprehend that this choice is irreversible, as emphasised by the government: “The government has made it clear that this is a one-time, final choice—no reversals or second chances.”
In the broader pension landscape, this shift signifies a strategic adjustment aimed at providing more security for future retirees within the governmental workforce. Unlike the NPS, which is market-linked, the UPS offers a more predictable pension framework, potentially appealing to risk-averse employees. The financial implications on the government include increased fiscal commitments, but it underscores an intent to align employee benefits with inflation and cost of living adjustments. This move is part of a broader strategy to ensure sustainable and equitable pension benefits, reflecting a commitment to long-term employee welfare.
With the June 30 deadline approaching, Central government employees are advised to carefully evaluate the benefits of switching to the UPS. This move represents a significant step in pension reforms, aiming to enhance post-retirement security. Employees are encouraged to act promptly to ensure their transition is completed within the stipulated timeframe, as no second opportunity to switch will be provided once the deadline elapses. The decision to switch should be made after considering personal financial goals and retirement plans.
How to migrate from NPS to UPS: Online and offline process
Central government employees eligible to switch from the National Pension System (NPS) to the Unified Pension Scheme (UPS) can complete the transition digitally through the official e-NPS portal. Here’s how:
Access the portal:
Visit https://enps.nsdl.com and look for the “NPS to UPS Migration” option listed under the Unified Pension Scheme section.
Enter your credentials:
Provide your Permanent Retirement Account Number (PRAN) and date of birth, then complete the captcha for verification.
Authenticate via OTP:
A one-time password will be sent to your registered mobile number or email ID. Enter this OTP to move forward.
Accept the declaration:
Confirm that you understand and accept the one-time, non-reversible nature of your decision to opt into UPS.
Complete e-signature:
Use your Aadhaar number or Virtual ID to electronically sign the form. You’ll receive an OTP linked to your Aadhaar for this step.
Download confirmation:
Once the process is complete, an acknowledgment number will be generated. A PDF copy of your UPS migration form will also be available for download.
Prefer offline? Here’s how:
If you’d rather apply manually, visit https://www.npscra.nsdl.co.in/ups.php to download Form A2. Fill out the form and submit it to your designated nodal office for further action.
Whether online or offline, this decision is final and irreversible, so employees are urged to assess the benefits of UPS before making the switch.