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UPS Enrollment Hits 1.18 Lakh; Centre Highlights Tax Parity And Gratuity Benefits
The Centre has no proposal to amend or replace the Unified Pension Scheme, Finance Minister Nirmala Sitharaman told the Lok Sabha, reaffirming that the pension framework will continue as an optional scheme under the National Pension System.
In a written reply to Parliament, Sitharaman said there is currently no proposal to make changes to the UPS structure. The scheme is available to eligible Central government employees covered under the NPS.
“UPS has been introduced as an option under NPS for the employees of the Central Government who are covered under the NPS. As on date, there is no proposal under consideration to make any changes or replace the UPS,” the finance minister said.
The Unified Pension Scheme came into force on April 1, 2025. It was introduced to provide greater certainty over retirement income while retaining the contributory structure of NPS.
As of July 19, 2026, a total of 1,18,404 employees, including new recruits, serving employees and eligible retirees, had opted for UPS, according to the government.
What Is Unified Pension Scheme?
UPS is an option available to central government employees covered under NPS. Unlike NPS, where retirement income depends on market-linked returns and the accumulated corpus, UPS provides an assured pension subject to specified eligibility conditions.
Under UPS, eligible employees receive a pension equivalent to 50% of their average basic pay during the last 12 months before retirement. The scheme also provides inflation-linked revisions.
In case of the pensioner’s death, eligible family members can receive a family pension equivalent to 60% of the employee’s pension.
The scheme also covers certain eligible retirees who retired on or before March 31, 2025, provided they completed at least 10 years of regular service. Eligible legally wedded spouses of expired retirees are also covered.
No Formal Review Of UPS Yet
The government has not conducted a formal assessment of the UPS so far, Sitharaman told Parliament.
The scheme has been operational only since April 2025, meaning the Centre has not yet undertaken a formal review of its implementation or performance.
The government had earlier extended the deadline for employees to choose UPS until November 30, 2025, following requests from employee organisations and associations for additional time.
Also Read: How Central Government Officers Can Compare Pension Plans
UPS Offers Additional Retirement Benefits
Employees opting for UPS continue to receive certain benefits available under the Central Civil Services rules. These include retirement gratuity and death gratuity under the Central Civil Services (CCS) Rules, 2021.
In cases of death in service, invalidation or disablement, UPS subscribers can also opt for benefits available under the applicable CCS Rules. The government has also extended the tax benefits available to NPS subscribers to employees choosing UPS.
Employees who switched from NPS to UPS were provided a one-time and irrevocable option to return to NPS.
UPS Vs OPS And NPS: What Changes?
The Old Pension Scheme (OPS) provided a pension linked to 50% of the last basic pay along with applicable dearness allowance and was fully funded by the government.
Under NPS, retirement income is based on the accumulated corpus and market-linked returns, with contributions from employees and the government.
UPS, meanwhile, follows a contributory model but provides an assured pension of 50% of the average basic pay of the final 12 months, subject to the scheme’s conditions.
For family members, UPS provides a family pension of 60% of the employee’s pension, while the benefit under NPS depends on the accumulated retirement corpus and applicable annuity arrangements.
For now, the Centre’s latest response makes it clear that UPS will continue in its existing form, with no proposal under consideration to amend or replace the scheme.
Also Read: NPS Or UPS? How The Two Pension Schemes Differ And Which Is Right For You
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