Big Pension Update: Government Employees Must Choose Between UPS & NPS Before June 30

In a major development for Central Government employees, those currently enrolled in the National Pension System (NPS) and seeking a guaranteed pension after retirement now have an important decision to make. The government has set a deadline of June 30, 2025 for employees to opt into the new Unified Pension Scheme (UPS). Failing to act by this date will automatically keep employees in the existing NPS.

As the deadline approaches, it is crucial for government employees to understand the key differences between UPS and NPS — and make an informed choice about their retirement future.

Why Choose the Unified Pension Scheme?

The Unified Pension Scheme (UPS) is designed to offer government employees a fixed monthly pension — much like the now-discontinued Old Pension Scheme (OPS). It provides several notable benefits:

• Guaranteed Pension: Employees with at least 25 years of service will receive 50% of their average basic salary from the last 12 months before retirement as a monthly pension.

• Minimum Pension Guarantee: Those who have served a minimum of 10 years will receive at least ₹10,000 per month as pension — a valuable safety net for employees with shorter service periods.

• Family Support: In the event of an employee’s death, the spouse will continue to receive 60% of the pension amount, ensuring long-term financial support for the family.

• Inflation Protection: The pension will include Dearness Allowance (DA) / Dearness Relief (DR), helping pensioners maintain their purchasing power amid rising inflation.

• Lump-Sum Benefit: Upon retirement, employees will receive an additional 10% of their salary as a lump sum for every six months of service, providing extra financial cushioning.

How to Opt into UPS: Online & Offline Options

To simplify the process, the government has enabled an online application system through the e-NPS portal. Here’s how employees can apply:

1. Visit the e-NPS portal and navigate to the “Unified Pension Scheme” section.

2. Enter PRAN (Permanent Retirement Account Number), Date of Birth, and the security captcha.

3. Verify your identity through an OTP sent to your registered mobile/email.

4. Complete and submit the online declaration form confirming your choice of UPS.

5. E-sign the form using Aadhaar or Virtual ID (VID).

6. Download the acknowledgment for your records.

Offline applicants can download Form A2 and submit it to their department’s nodal office.

Key Differences Between NPS & UPS

Understanding the core differences between the two pension schemes is critical:

• NPS (National Pension System):
  Under NPS, a portion of your salary is invested in market instruments such as equities and bonds. The resulting pension amount depends on market performance, meaning it is variable and carries an element of risk.

• UPS (Unified Pension Scheme):
  UPS offers a fixed, market-risk-free pension that is directly linked to an employee’s basic salary, providing a stable and predictable income in retirement.

Which Plan Should You Choose?

The right pension plan depends on individual circumstances and risk appetite:

• NPS is better suited for employees with 15–20 years left before retirement, who are comfortable with investment risks and looking for higher returns.

• UPS is ideal for those who prioritize security and stability, prefer a guaranteed monthly income, and want to avoid the risks associated with stock market fluctuations.

With only a year remaining before the June 2025 deadline, it is essential that eligible employees carefully weigh their options and take timely action to secure their financial future.

Author Profile

Kuldeep Singh Chundawat

My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.

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