What is UPS and who are eligible ?

The Pension Fund Regulatory and Development Authority (PFRDA) has issued the 2025 regulations for the operation of the Unified Pension Scheme (UPS) under the National Pension System (NPS). This notification establishes a structured framework for implementing UPS for central government employees covered under NPS.

Chapter I: Preliminary

1. Short Title & Commencement
   • These regulations shall be known as the Pension Fund Regulatory and Development Authority (Operation of Unified Pension Scheme under NPS) Regulations, 2025.
   • They are intended to define responsibilities, procedures, and implementation mechanisms for UPS under NPS.
   • The regulations will come into effect from April 1, 2025.
2. Definitions
   • Defines key terms such as “Authority,” “Unified Pension Scheme,” “Default Pattern,” “Benchmark Corpus,” and “Personal Corpus.”
   • Establishes eligibility criteria and responsibilities of various government offices involved in UPS implementation.

Chapter II: Applicability

3. Eligibility for UPS
   • Available to:
     1. Existing central government employees under NPS as of April 1, 2025.
     2. New central government recruits joining on or after April 1, 2025.
     3. Employees who retired or took voluntary retirement before March 31, 2025, and their legally recognized spouse in case of deceased employees.
   • Employees must opt for UPS within the prescribed timeframe.

Chapter III: Registration

4. Enrollment Process
   • Employees must submit applications in prescribed formats (Form A1, A2, B2, B6) through online or physical modes.
   • Central Recordkeeping Agency (CRA) will issue acknowledgments and verify records.
   • Options once exercised are final and irrevocable.
5. Permanent Retirement Account Number (PRAN)
   • Employees opting for UPS will be assigned a PRAN, linked with their contributions and benefits.

Chapter IV: Contributions

6. Personal Corpus Contributions
   • Monthly employee contribution: 10% of Basic Pay + Dearness Allowance.
   • Government contributes an equal amount.
   • Contributions deducted by Drawing & Disbursing Officer (DDO) and remitted to CRA.
7. Pool Corpus Contributions
   • Additional 8.5% of Basic Pay + DA contributed by the government for employees under UPS.

Chapter V: Investment of Contributions

9. Investment Guidelines
   • Contributions managed by Pension Funds authorized by the government.
   • Employees can choose investment patterns or opt for the default pattern.

Chapter VI: Benefits

13. Eligibility for Benefits

• Minimum 10 years of qualifying service required.
• Benefits applicable in cases of retirement, voluntary retirement, or discharge under Fundamental Rule 56 (j).

14. Lump Sum Payment

• Upon retirement, a lump sum equal to 10% of last drawn pay + DA per completed 6 months of service is payable.

15. Guaranteed Pension Payments

• 50% of the average of last 12 months’ basic pay is payable as pension.
• Minimum guaranteed pension: ₹10,000 per month for eligible employees.

16. Family Pension

• In case of death, 60% of the pension amount will be payable to the legally recognized spouse.

17. Dearness Relief

• Central government will periodically announce dearness relief rates on UPS pension payments.

Chapter VII: Withdrawals & Payment Procedures

18. Partial Withdrawals

• Employees can make three withdrawals during service for education, marriage, house purchase, or medical emergencies.
• Each withdrawal limited to 25% of employee’s contributions.

19. Payment of Benefits

• Payments will be made as per UPS regulations and PFRDA directives.

Effective benefit under UPS

The UPS under NPS provides a structured pension scheme for central government employees, ensuring financial security post-retirement. These regulations clarify contribution structures, eligibility, benefits, and procedures for pension management under the scheme.