Investment: Can employees invest in NPS along with UPS? Learn how to benefit from both schemes..

The Central Government has attempted to provide employees with ease and stability in pension management through the Unified Pension Scheme (UPS). However, the last date for joining this scheme has now been extended to November 30, 2025, to provide employees with sufficient time to opt for UPS. This change was due to the lackluster response from employees and their questions about whether they could also opt for NPS (National Pension System) along with UPS.

What is UPS?
UPS was introduced specifically for Central Government employees who joined service after January 1, 2004. This scheme differs from the traditional pension system, which combines monthly contributions from employees with government contributions. Both are invested in a pension fund, and the pension amount is determined based on the length of service, contributions, and service period. UPS provides employees with a fixed and reliable pension that is paid as a regular monthly income.

What is NPS?
NPS, or National Pension System, is a scheme open to all citizens of India. There are two types of accounts: Tier-1 and Tier-2. Tier-1 is the primary pension account, where investments are locked in for a long period and withdrawals are made after retirement. Tier-2 accounts offer more flexibility for investments and withdrawals and can also be used for tax planning. Government employees are compulsorily enrolled in Tier-1 under the NPS, but they also have the option of UPS.

Can one invest in both UPS and NPS?

This question is on the minds of many government employees, and the answer is yes, but with certain conditions. Employees can choose UPS and also open an NPS account, but the NPS account must be under the All Citizen Model. This means that having UPS is not a bar to joining NPS. This facility provides government employees with greater flexibility and better investment options.

The Pension Fund Regulatory and Development Authority (PFRDA) has also confirmed this on its official portal. He says that UPS customers are allowed to open NPS Tier-1 and Tier-2 accounts voluntarily. This means that UPS employees can invest their pension funds in different schemes and build better financial security for the future.

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