Unified Pension Scheme : Features and Benefits for Central Government Employees

1. Unified Pension Scheme Key Features and Benefits

2. Introduction Everyone dreams of a peaceful life after retirement. For government employees, it’s a time to slow down, relax and enjoy the rewards of years of hard work. But to truly enjoy this phase, financial security is key—a stable monthly income that covers daily needs and removes money-related stress. With this said, the Government of India has implemented a new plan that has been set aside for Central Government employees (currently working employees or future employees), called the Unified Pension Scheme (UPS). It is a simple, safe and smart way to make sure employees don’t have to worry about money in their old age. It includes not just monthly pension but also support for the family after the employee passes away.

3. What is the Unified Pension Scheme (UPS)? The Unified Pension Scheme is a new retirement plan by the Indian government, starting from April 1, 2025. It is meant for Central Government employees, including those under NPS and new joiners after this date. Both the employee and the government will contribute monthly to the pension fund. After retirement, employees will receive a fixed monthly pension based on their salary. This ensures steady income and financial stability in their later years. The scheme is designed to make post-retirement life more secure and predictable.

4. Who Can Join UPS? Not everyone can join the Unified Pension Scheme. Here’s who is eligible: All Central Government employees who are already working under the NPS and were still in service as of March 31, 2025. New Central Government employees who will join on or after April 1, 2025 Employees who retired before April 1, 2025, but were under NPS during their service. Legally married spouses of retired employees who passed away before April 1, 2025. Employees must choose this scheme within three months from the date it becomes available to them. Once chosen, they cannot switch back, so the decision must be made carefully.

5. Key Features of the Unified Pension Scheme Here are the key features and benefits that make UPS special: Guaranteed Monthly Pension : Employees who work for 25 years or more will receive 50% of their average basic salary (from the last 12 months of service) as pension every month after retirement. If someone has worked between 10 to 25 years, they will still get a pension, but the amount will be proportional to the years served. Assured Pension : No matter what, if an employee retires after at least 10 years of service, they will receive a minimum pension of ₹10,000 per month. Family Pension : If the retired employee passes away, their spouse will receive 60% of the pension amount every month as a family pension.

6. Key Features of the Unified Pension Scheme Inflation Protection : The pension amount will increase from time to time with Dearness Relief, which is linked to the rising cost of living (inflation). This ensures that pensioners don’t lose buying power. Lump Sum Benefit : On retirement, employees will also get a lump sum amount equal to 10% of their salary (basic + DA) for every six months of service completed. This amount is given in addition to the monthly pension. Employee and Government Contributions : Both the employee and the government will contribute 10% of the employee’s Basic + DA every month to build the pension fund. The government will also add extra funds as needed to make sure the promised pension amount is paid out.

7. ELIGIBILITY & BENEFITS UNDER UPS Employees are eligible for Unified Pension Scheme (UPS) benefits under the following conditions: Superannuation: Those who retire after completing at least 10 years of service will receive benefits from their retirement date. Retirement by Government: If the government retires an employee under Fundamental Rule 56(j) (not as a penalty), benefits will start from the date of retirement. Voluntary Retirement: Employees who choose to retire voluntarily after completing 25 years of service will receive benefits from their expected superannuation date.

8. Payment of Benefits under UPS Payments follow UPS rules and government orders. Applications must be submitted in the required forms (Schedule I) to the Head of Office or DDO. Application Process: For retiring employees: Submit Form B1 at superannuation / voluntary retirement / retirement under 56 (j) (not as a penalty). For past retirees: Submit Form B2 For deceased employees: 1. Spouse submits Form B3 (if UPS. benefits were availed) or Form B5 (if not availed) 2. Spouse of past retirees: Submit Form B4 (if UPS benefits were availed) / B6 (if not availed). After retirement, the employee’s NPS corpus is moved to the Pool Corpus (up to a limit). If it’s lower, monthly payout is reduced unless topped up. Retirees before March 31, 2025, receive payments directly from the Pool Corpus. UPS Payout Order is issued by the PAO and sent to NPS Trust, including all payment and account details.

9. Conclusion The Unified Pension Scheme (UPS) is more than just a retirement plan—it's a promise of dignity, security and peace of mind for Central Government employees. With features like guaranteed monthly pensions, inflation protection, family support and flexible withdrawal options, UPS offers a solid financial cushion during retirement. Whether you're currently working or planning to join government service soon, this scheme ensures that your golden years are truly stress-free. Choose wisely and invest in a future where your financial freedom is guaranteed! Secure Tomorrow with UPS! Explore UTI Pension Fund Limited.

10. Do you have any question? Contact - contact@utipf.co.in Visit - https://www.utipension.com/