UPS Deadline Extended: Government Gives Central Employees More Time to Switch from NPS to Unified Pension Scheme

The Central Government has granted a major relief to its employees by extending the deadline to opt for the Unified Pension Scheme (UPS). Employees who wish to switch from the National Pension System (NPS) to UPS now have until November 30, 2025, to make their decision. Earlier, the deadline was set for September 30, 2025, but with limited participation so far, the government has given workers another chance to review the benefits and opt for the scheme.

This decision was officially announced by the Finance Ministry and communicated to the Pension Fund Regulatory and Development Authority (PFRDA).

What is the Unified Pension Scheme (UPS)?

The Unified Pension Scheme was launched on April 1, 2025, as an alternative to the existing NPS. Unlike NPS, UPS guarantees a fixed monthly pension after retirement. Under the scheme:

• Employees contribute 10% of their basic salary.

• The government contributes a higher share of 18.5%.

• On retirement, an employee is eligible to receive a pension equal to up to 50% of the average basic salary of the last 12 months.

The main objective of UPS is to provide better retirement security and stable post-retirement income to central government employees.

Low Enrollment Prompts Deadline Extension

Despite the government’s efforts, participation in the scheme has remained low. Out of nearly 23 lakh central government employees, only about 1 lakh workers have opted for UPS so far.

This lukewarm response was a key factor behind the extension. By giving employees more time, the government hopes workers will carefully analyze the benefits of switching from NPS to UPS and make an informed decision. Employee unions had also demanded an extension, highlighting that many workers needed additional clarity on the scheme before making the transition.

Recent Improvements in UPS

To make the scheme more attractive, the government has recently introduced several enhancements. These include:

• Switching option for those moving from NPS.

• Resignation benefits, ensuring financial support if an employee quits service before retirement.

• Compulsory retirement benefits under specific conditions.

• Tax exemptions to reduce financial burden on employees.

These reforms were designed to address earlier concerns and provide greater flexibility, encouraging more employees to join the scheme.

Minimum and Maximum Pension Benefits

The scheme ensures a strong safety net for employees with varying service durations:

• Employees with at least 10 years of service are eligible for a minimum monthly pension of ₹10,000.

• Those who complete 25 years or more in service will receive 50% of their last drawn basic salary as a pension.

This ensures that employees have both a guaranteed floor level of pension and the possibility of a higher pension if they serve longer.

Who Can Join UPS?

The UPS is particularly beneficial for employees who joined the central government on or after January 1, 2004, since they were automatically enrolled under the NPS framework. For this group, the scheme offers a more predictable and secure retirement option compared to NPS, which is market-linked.

Final Takeaway

By extending the deadline to November 30, 2025, the government has given central employees one more opportunity to assess the Unified Pension Scheme. With better features, higher government contribution, tax exemptions, and a guaranteed post-retirement income, the UPS aims to improve financial security for lakhs of employees.

Those still weighing their options now have nearly two more months to make a well-informed choice between the existing market-driven NPS and the guaranteed-benefit UPS.