{"id":63835,"date":"2025-09-17T11:16:45","date_gmt":"2025-09-17T05:46:45","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=63835"},"modified":"2025-09-17T11:16:45","modified_gmt":"2025-09-17T05:46:45","slug":"nps-to-ups-govt-extends-one-time-switch-option","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/nps-to-ups-govt-extends-one-time-switch-option\/","title":{"rendered":"NPS to UPS: Govt Extends One-Time Switch Option"},"content":{"rendered":"<h2><b>Unified Pension Scheme Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Central government employees have until September 30 to opt for the Unified Pension Scheme (UPS) under NPS (National Pension System), introduced in April 2025.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite 23.94 lakh employees being eligible, only around 40,000 have opted so far.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To regulate service matters for those choosing UPS, the Department of Pension and Pensioners\u2019 Welfare notified the Central Civil Services (Implementation of the Unified Pension Scheme under the National Pension System) Rules, 2025, on September 2.<\/span><\/li>\n<\/ul>\n<h2><b>Govt Extends UPS Option to New Employees<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The government has allowed central employees who joined between April 1 and August 31, 2025, under NPS to migrate to the Unified Pension Scheme (UPS).\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This one-time option, available until September 30, 2025, aligns with the existing cut-off for other eligible categories.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employees opting for UPS will also retain the right to later switch back to NPS, ensuring flexibility in planning post-retirement financial security.<\/span><\/li>\n<\/ul>\n<h3><b>Switch Option from UPS to NPS<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">UPS subscribers have a <\/span><b>one-time option to switch to NPS, but cannot return to UPS<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The switch must be exercised at least one year before retirement or three months before VRS, and is barred in cases of dismissal, removal, compulsory retirement, or pending disciplinary proceedings.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Those not opting will remain under UPS.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employees switching to NPS will receive its benefits along with the differential 4% contribution, giving greater flexibility and informed choice for retirement planning.<\/span><\/li>\n<\/ul>\n<h2><b>Unified Pension Scheme (UPS)<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Before UPS, central government employees hired before January 1, 2004, were covered under the Old Pension Scheme (OPS), which guaranteed fixed pensions, while those joining after were under the <\/span><b>market-linked National Pension System (NPS)<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Amid persistent demands to restore OPS, the Union Cabinet approved the Unified Pension Scheme (UPS) in August 2024 as an optional scheme.\u00a0<\/span><\/li>\n<\/ul>\n<h3><b>About UPS<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">From April 1, 2025, the government introduced the <\/span><b>UPS as an option under NPS for central government employees<\/b><span style=\"font-weight: 400;\"> hired after January 1, 2004.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Around 23 lakh employees can choose between NPS and UPS.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unlike NPS, UPS guarantees an assured pension: 50% of the average basic pay of the last 12 months before retirement, provided the employee has served a minimum of 25 years.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In case of the pensioner\u2019s death, the spouse will receive up to 60% of the pension being drawn.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unlike the Old Pension Scheme, which guaranteed 50% of last drawn basic pay without employee contribution, <\/span><b>UPS combines assured benefits with mandatory contributions<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>Key Differences Between UPS and NPS<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>NPS is mandatory, while the UPS is optional<\/b><span style=\"font-weight: 400;\">, with employees given a one-time chance to switch back to NPS before retirement or VRS.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Under the NPS, through the Permanent Retirement Account Number (PRAN), employees contribute 10% and the employer 14% of basic pay plus dearness allowance (DA), with <\/span><b>pension benefits entirely dependent on the accumulated corpus<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In contrast, the UPS requires 10% contributions each from employee and employer, with an additional 8.5% contribution by the government to create a pool corpus.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This pool funds an assured pension of 50% of the employee\u2019s average basic pay over the last 12 months, provided a minimum of 25 years of service is completed.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unlike NPS, UPS guarantees a minimum monthly payout of \u20b910,000 after 10 years of service, ensuring greater financial security.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">UPS also offers a lump sum equal to one-tenth of the last basic pay plus DA for every six months of service, whereas NPS has no such provision.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employees dismissed from service are ineligible for the assured UPS payout.<\/span><\/li>\n<\/ul>\n<h2><b>Why the Unified Pension Scheme Is Slow to Take Off<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Although the government extended the deadline to September 30 for employees to opt into the Unified Pension Scheme (UPS), uptake remains low.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Department of Pension is holding awareness drives, but many employees still prefer the Old Pension Scheme (OPS), which required no employee contribution and guaranteed 50% of the last drawn basic pay plus DA as pension.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In contrast, UPS involves contributions and is seen as less beneficial.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Central Secretariat Service Forum has also criticised both NPS and UPS, reiterating its demand for a complete return to OPS.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <a href=\"https:\/\/indianexpress.com\/article\/explained\/govt-employees-ups-september-30-new-pension-scheme-1025337-10253378\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">IE<\/span><\/a><span style=\"font-weight: 400;\"> | <\/span><a href=\"https:\/\/www.livemint.com\/money\/personal-finance\/bank-manager-orchestrates-loan-fraud-to-siphon-off-crores-5-money-lessons-to-spot-and-avoid-scams-11758030350912.html\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">LM<\/span><\/a><span style=\"font-weight: 400;\"> | <\/span><a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2166789\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">PIB<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Govt extends one-time option for central employees to migrate from NPS to UPS till Sept 30, 2025. UPS offers assured pension, unlike market-linked NPS.<\/p>\n","protected":false},"author":18,"featured_media":63849,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,2736,22,59],"class_list":{"0":"post-63835","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-unified-pension-scheme","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/63835","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=63835"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/63835\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/63849"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=63835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=63835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=63835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}