Unified Pension Scheme (UPS): Eligibility, Benefits, Returns, Gratuity, Withdrawal Rules & Application Process

Q: What are the key features of the Unified Pension Scheme (UPS)?

The key features of the UPS are as follows:Assured pension amount equal to 50% of the average basic pay over the previous 12 months before retirement for employees with at least 25 years of service. Assured family pension of 60% of the pension immediately before the retiree’s demise will be given to her/his spouse.Assured minimum pension of Rs. 10,000 per month for employees with at least 10 years of service upon superannuation.Retirees will receive a lump sum payment along with their gratuity at the time of superannuation.

By Mayashree Acharya

Updated on: Jul 29th, 2025

9 min read

Latest Update: The cut-off date for Central Government employees to exercise or switch to the UPS is 30th September 2025.

The Central Government has launched a new pension scheme, Unified Pension Scheme (UPS), under which Central Government employees will receive a guaranteed pension amount after retirement by contributing 10% of their basic pay plus DA. The employer will also 18.5% of basic salary plus DA to the UPS.

Continue reading to know about the:

Eligibility for Unified Pension Scheme
Pension amount received under UPS
Gratuity provided under UPS
Unified Pension Scheme withdrawal rules

Unified Pension Scheme Overview

Scheme Name	Unified Pension Scheme (UPS)
Launch Date	24th August 2024
Notification Date	24th January 2025
Implementation Date	1st April 2025
Beneficiaries	Central Government employees, including newly joined and existing NPS subscribers
Last Date to Switch from NPS to UPS	30th September 2025
Employee Contribution	10% of basic salary + DA
Employer Contribution	18.5% of basic salary + DA
Minimum Service	10 years for minimum pension and 25 years for full pension
Pension Amount	Pension of 50% of the average basic pay over the last 12 months before retirement for employees having at least 25 years of service
Pension Amount	Rs. 10,000 per month upon superannuation after at least 10 years of service
Gratuity	Eligible for retirement and death gratuity
Partial Withdrawal	Allowed after 3 years for specific reasons
Official Website Link	https://www.npscra.nsdl.co.in/ups.php

What is Unified Pension Scheme?

The Central Government introduced the Unified Pension Scheme (UPS) on 24th August 2024 for Central Government employees aiming to provide stability, dignity and financial security for government employees post-retirement, ensuring their well-being and a secure future.

Currently, government employees are covered under the National Pension System (NPS). These employees can continue with NPS or switch to the UPS scheme. However, once employees choose UPS, the decision is final and cannot be reversed. The option to choose UPS has to be exercised within 30th September 2025. The scheme was implemented all over India from 1st April 2025 and 31,555 Central Government employees have already opted for UPS till 20th July 2025.

State Governments can also adopt and implement the UPS scheme for State Government employees. Maharashtra is the first state to implement UPS. The Maharashtra cabinet decided to implement the scheme for state Government employees on 25th August 2024.

Unified Pension Scheme Eligibility

Existing Central Government Employee: An existing Central Government employee covered under the NPS and is in service as on 1st April 2025.
Newly Joined Central Government Employees: A new recruit in the Central Government services, joining service on or after 1st April 2025.
Retired NPS Subscribers: A Central Government employee who was covered under the NPS and who has superannuated, voluntarily retired or retired under the Fundamental Rules 56(j) on or before 31st March 2025.
Spouse of Demised Employee: The legally wedded spouse of a retired or superannuated Central Government employee being a NPS subscriber and demised before exercising the option for UPS.

Who Are Not Eligible For UPS?

The following Central Government employees are not eligible for UPS:

Employee superannuating or resigning before 10 years of service
Employees removed from service
Employees dismissed from service

UPS Scheme Minimum Pension Amount

The UPS guarantees a minimum pension of Rs. 10,000 per month for government employees who retire after completing at least 10 years of service.

Benefits of Unified Pension Scheme

Assured Pension: Retired employees will receive a pension of 50% of their average basic pay over the previous 12 months before retirement. This benefit is given to employees with at least 25 years of service. Similar benefits are offered to employees with shorter service periods ranging from 10 to 25 years.
Government Contribution: The government will contribute 18.5% of the employee’s basic salary to the pension fund. The employees will contribute 10% of their basic salary to the pension fund.
Assured Family Pension: In case of the pensioner’s death, 60% of the pension immediately before the retiree’s demise will be given to their spouse.
Assured Minimum Pension: Upon superannuation, an employee with at least 10 years of service will receive Rs. 10,000 monthly.
Inflation Indexation: Inflation indexation will be provided on the assured, minimum, and family pensions. The Dearness Relief (DR) will be based on the All India Consumer Price Index for Industrial Workers (AICPI-IW), similar to service employees.
Lump Sum Payment: Retirees will receive a lump sum payment along with their gratuity at the time of superannuation. This payment will equal one-tenth of the monthly emoluments (pay + DA) as on the superannuation date for every six months of completed service. It will not reduce the amount of assured pension.

How to Apply for Unified Pension Scheme?

Eligible Central Government employees can apply for UPS either online or offline.

Online process

Visit the Protean website.
Click on ‘Unified Pension Scheme’ option.
Select ‘Migrate from NPS to UPS’ if you are existing member of NPS or ‘Register for UPS’ option if you are a newly recruited employee joining service after 1st April 2025.
Fill out the required details and submit.

Offline process

Visit the Protean CRA website.
Under ‘Forms under Unified Pension Scheme’, click on the relevant form to download it.
- Click on Form A1 if you are a newly recruited employee joining service after 1st April 2025.
- Click on Form A2 if you are existing member of NPS and want to exercise the option of UPS.
- Click on Form B1 if you are a NPS subscriber and retired on or after 1st April 2025.
- Click on Form B2 if you are have retired before 31st March 2025.
- Click on Form B5 if you are a spouse of a deceased retiree who has retired on or after 1st April 2025 but has not availed UPS.
- Click on Form B6 if you are a spouse of a deceased retiree who retired before 31st March 2025 without availing UPS.
Fill out the form and submit it to the DDO (Drawing and Disbursing Officer).
The DDO will check the details and forward it to the PAO (Pay and Accounts Officer) for final approval.

UPS Gratuity

Under the Unified Pension Scheme, there are two types of gratuity:

Retirement gratuity
Death gratuity

Retirement Gratuity

Retirement gratuity is the lump-sum payment made by the employer to the employee upon retirement for serving the company for a specified time. It will be paid after a minimum of 5 years of service.

Central government employees are eligible for retirement gratuity under the following conditions:

Superannuation and Invalidation: Retirement occurs when the employee reaches the age of 60 or the organisation's predetermined superannuation age. It also happens when the employee has retired under rule 56 of Fundamental Rules 1922 or rule 12 of the Central Civil Services (Implementation of National Pension System) Rules, 2021.
Unique Voluntary Retirement Scheme (SVRS): This scheme lets government employees identified as surplus due to organisational changes opt for early retirement with specific benefits. It facilitates workforce optimisation while providing financial support to the retiring employees.
Absorption into Other Services: The absorption of a government worker to a position in a government-owned or government-financed entity. Upon entry, the worker transfers from the previous government position to the new position, bringing over the service years and benefits, subjecting to some rules and regulations.

Calculation of Retirement Gratuity

Gratuity Amount = (1/4) × Emoluments × Completed Six-Monthly Periods of Service

Emoluments = Basic Pay * Dearness Allowance
Gratuity cannot exceed 16.5 times of the emoluments or 25 lakhs, whichever is lower

Death Gratuity

Death gratuity is a one-time lump sum payment made to provide financial support during a difficult time to the family/nominee of the deceased government employee, regardless of the tenure of their service. The death gratuity is payable if the government employee dies during the time of their service.

Calculation of Death Gratuity

The death gratuity of an employee is determined based on their service tenure.

Tenure of Service	Death Gratuity
< 1 year	2x emoluments
>= 1 year but < 5 years	6x emoluments
>= 5 year but < 11 years	12x emoluments
>= 11 year but < 20 years	20x emoluments
> 20 years	Half of the emoluments for every six months of service

UPS Withdrawal Rules and Conditions

The UPS withdrawals and computation of fixed payouts for Central Government employees are as follows:

Complete Withdrawal on Retirement: Employees can withdraw up to 60% of their UPS corpus. This withdrawal will, however, reduce their regular pension payouts. In the event of the employee's death, the spouse receives 60% of the last pension paid for a lifetime. Dearness Relief is granted only to those who have started receiving their pensions.
Partial Withdrawals: Employees can make partial withdrawals up to three times during their service, following a three-year lock-in period. Each withdrawal can be up to 25% of the employee's contributions and is allowed under specific circumstances, including:
- Purchasing or constructing a home (if the employee does not own one).
- Funding children's higher education or marriage.
- Covering medical expenses related to chronic illnesses or disabilities.
- Pursuing self-development or skill enhancement.

If an employee is too unwell to apply, a family member can initiate the withdrawal process. Employees can repay the amount to keep their pension benefits intact.

UPS Payout Calculation

Type of Payout	Eligibility	Pension Amount
Full Assured Payout	At least 25 years of service	50% of the average pay over the last 12 months before retirement
Proportional Payout	Less than 25 years of service	Calculated proportionally based on the years of qualifying service
Minimum Guaranteed Payout	At least 10 years of service	Rs.10,000 per month

Use the UPS Calculator to estimate your pension payouts under the UPS scheme.

UPS Payment Rules and Process

Payment Form: Eligible retired employees or eligible spouse of a deceased retiree must submit the appropriate claim form applicable to them (Form B1, B2, B3, B4, B5, B6) to the Head of office or DDO.
Corpus Transfer: The individual UPS corpus is transferred to the pool corpus limited to the benchmark corpus value at retirement. The assured monthly payout is reduced if the corpus falls short of the benchmark, unless the subscriber adds to the shortfall. However, retirees before 31st March 2025 will receive payouts from the pool corpus without any transfer.
Payout Order: The PAO will issue the payout order and forward it to the NPS trust. The payout order will includes all key details like final corpus, service history, pension amount and bank account information.
Payment: Once the NPS trust approves the payout order, the UPS payments are released, including monthly pension, lump sum amount, final withdrawal amount up to 60%, Dearness Relief (DR) and any surplus corpus. The pension and DR will be credited every month to the subscriber’s bank account.

Impact of UPS 2025 on Government Workers

The Unified Pension Scheme has introduced significant changes for Central Government employees in respect of pension. It provides a stable and guaranteed income post-retirement as compared to the NPS. Under the UPS, employees will receive 50% of their average basic pay as pension upon retirement when they have 25 years of service.

However, even if an employee retires before 25 years but after serving 10 years of service, he/she will receive an assured amount of Rs. 10,000 per month as pension. Additionally, the employer makes an enhanced contribution under this scheme of 18.5% of the basic pay, enhancing the retirement corpus.

An employee will also receive gratuity upon retirement or death. Family pension is also provided for the spouse of a deceased employee, securing the future of the family. UPS addresses the uncertainties associated with market-linked schemes under the NPS by providing assured minimum pension amount, gratuity and family pension.

For example: For example, a government employee retiring with Rs. 80,000 basic pay after 25 years will receive Rs. 40,000 monthly under UPS (50% of Rs. 80,000). However, under NPS, the monthly payout may vary between Rs. 25,000 -Rs. 35,000, depending on corpus and annuity returns.

UPS vs NPS

The below table provides the differences between UPS and NPS:

Particulars	UPS	NPS
Employer's contribution	Employers will contribute 18.5% of the basic salary to the pension fund.	Employers will contribute 14% of the basic salary to the pension fund.
Employees contribution	Employees will contribute 10% of the basic salary to the pension fund.	Employees will contribute 10% of the basic salary to the pension fund.
Pension amount	50% of the average basic pay over the last 12 months before retirement for employees with 25 years of service.	NPS does not provide a guaranteed fixed pension amount. It depends on the returns on investments and the total accumulated corpus.
Family pension	In the case of the retiree’s death, 60% of the pension received immediately before the retiree’s demise will be provided to his/her family.	The family pension provided under the NPS depends on the accumulated corpus and the chosen annuity plan.
Minimum pension amount	Rs. 10,000 per month for employees retiring with at least 10 years of service.	The pension amount depends on the investments made in the market-linked investment schemes.
Lump sum amount	A lump sum amount is provided to employees upon superannuation, calculated as 1/10th of their last drawn monthly pay for every six months of completed service.	Employees can withdraw up to 60% of the NPS corpus as a lump sum upon superannuation.
Market exposure	There is partial market exposure since investments are made in government debt.	There is high market exposure since investments are made in a mix of equity and debt instruments.
Inflation protection	The UPS provides inflation protection, with pensions adjusted based on the AICPI-IW.	There is no provision in NPS for automatic DA increments for inflation protection.

The UPS draws features from both the Old Pension Scheme (OPS) and the National Pension Scheme (NPS). UPS provides assured pensions, minimum pensions, and family pensions, providing security to retired employees. It also offers protection against inflation by adjusting the Dearness Relief (DR) of the employees, helping them maintain financial dignity post-retirement.

Frequently Asked Questions

When will the UPS scheme come into effect?

The UPS scheme will come into effect from 1 April 2025.

What are the key features of the Unified Pension Scheme (UPS)?

The key features of the UPS are as follows:

Assured pension amount equal to 50% of the average basic pay over the previous 12 months before retirement for employees with at least 25 years of service.
Assured family pension of 60% of the pension immediately before the retiree’s demise will be given to her/his spouse.
Assured minimum pension of Rs. 10,000 per month for employees with at least 10 years of service upon superannuation.
Retirees will receive a lump sum payment along with their gratuity at the time of superannuation.

Is the UPS scheme better than NPS for long-term benefits?

UPS provides a guaranteed pension amount, while the pension amount under NPS depends on the investments made in the market-linked security schemes. While UPS provides an assured pension, NPS may provide a higher pension amount due to higher returns in the market-linked investments. UPS may be better for employees who do not want to take any risk and get a guaranteed pension amount, while NPS may be better for employees who are willing to make market-based investments and get a higher return.

What is the difference between OPS and UPS pension?

The OPS provides a pension of 50% of the last drawn salary of employees, while UPS also provides a pension of 50% of the last drawn salary of employees but only for those employees who have completed 25 years of service. Employees do not have to contribute to the pension fund under OPS, but employees need to contribute 10% of their basic pay under UPS, while the employer will contribute 18.5% of the basic salary.

What is the last date to switch to the Unified Pension Scheme (UPS)?

The last date to exercise the option for UPS or switch to UPS from NPS is 30th September 2025.

Does UPS offer a lump sum pension?

Yes, retired employees will receive a lump sum payment along with their gratuity at the time of superannuation. This payment will be equal to one-tenth of the monthly emoluments (pay + DA) as on the superannuation date for every six months of completed service. However, it will not reduce the amount of assured pension.

Who is eligible for the UPS pension scheme?

Central Government employees currently enrolled in NPS are eligible to opt for the UPS if they are:

Existing Employees: Those serving as of 31st March 2025.
New Recruits: Employees joining on/after 1st April 2025, can choose between NPS and UPS.
Retirees: Employees who retired before 31st March 2025, can opt into UPS under certain conditions.
Spouses: Spouses of deceased employees covered under NPS and retired before 31st March 2025, can also opt into UPS so that their financial support is continued.

Can you opt out of Unified Pension Scheme?

Once an employee opts into the UPS, the decision is irrevocable. They cannot revert to the NPS or withdraw from the UPS. This policy is designed to maintain the integrity and sustainability of the pension system, ensuring that both the government and employees can plan for long-term financial commitments without the complexities that reversible decisions might introduce. Therefore, it is crucial to thoroughly evaluate the pros and cons before deciding on UPS or NPS.

Can I withdraw money from UPS before retirement?

UPS is a long-term retirement benefit scheme, focused on providing financial security after retirement . Employees can however make partial withdrawals up to three times during their service, following a 3-year lock-in period.

Each withdrawal can be up to 25% of the employee's contributions and is only allowed under specific circumstances, like home purchase, children's education/marriage, medical expenses, or skill development. Complete withdrawal before retirement isn't allowed.

What happens to UPS money if I resign?

If you resign before retirement under the UPS, you won't receive UPS benefits. Instead, your contributions will follow NPS rules. Your corpus remains in your NPS account, and if something happens to you, it will go to your nominee. The government's 18.5% contribution stops, and withdrawals are subject to NPS guidelines, meaning you can either withdraw the amount as per NPS rules or use it for an annuity.

Who is eligible for assured payouts under UPS?

Employees are eligible for an assured payout under UPS if they meet any of the following criteria:

Superannuation after completing at least 10 years of qualifying service.
Retirement under Fundamental Rule (FR) 56(j), a provision allowing the government to retire employees in the public interest after a certain age or service period, provided it is not imposed as a penalty.
Voluntary retirement after 25+ years of service, with payouts commencing from the original superannuation date.

What is the lock period of UPS?

UPS requires a minimum of 10 years of qualifying service to be eligible for assured payouts. Partial withdrawals may be permitted after a three-year lock-in period under specific conditions.

About the Author

Mayashree Acharya

Senior Content Writer

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

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