PFRDA (OPERATIONALISATION OF UNIFIED PENSION SCHEME UNDER NATIONAL PENSION SYSTEM) REGULATIONS, 2025

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY (OPERATIONALISATION OF UNIFIED PENSION SCHEME UNDER NATIONAL PENSION SYSTEM) REGULATIONS, 2025

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Unified Pension Scheme (UPS)

The information contained in this presentation is for illustrative, informational and educational purposes only. In case of any conflict or ambiguity, the prescriptions as contained in the relevant Act, Regulations and Notifications shall prevail.

The Government of India, in pursuit of pension reform, introduced NPS for CG employee w.e.f 01/01/2004. It replaced the defined benefit with a defined contribution system to promote long term financial sustainability. In the course of NPS implementation, various Central and SG stakeholders noted the need:

UPS is an option under the NPS for CG employees and is effective from 1st April, 2025. It provides assured pay-out.

Applicability

1. An existing CG employee covered under NPS, as on April 1st, 2025.
2. New recruit who joins CG service on or after April 1st, 2025.
3. A CG employee covered under NPS and superannuated or voluntarily retired or retired under FR 56 (J) on or before March 31, 2025 and is eligible for UPS or their legally wedded spouse as on date of superannuation/retirement, in case of demise.

Timelines to Exercise UPS Option

• Within 03 months from 1st April 2025 (existing employees/retirees to claim benefits)
• 30 days from joining (new recruits).

An employee can exercise the option to enroll under UPS in the following manner:

• New recruit opted UPS, A1 Form through online or to DDO.
• Migration from NPS to UPS, A2 Form to be submitted online or to DDO.

Irrevocability: Option for UPS, once exercised is final and cannot be changed. Failing to exercise UPS option within prescribed timelines, shall be deemed to have opted to continue under NPS without UPS option. Once UPS option exercised, NPS corpus of employees, will be transferred to the employee’s individual corpus under the UPS.

Contributions, Pool Corpus and Implications

• The contribution of employees will be 10% of (basic pay + DA) and matching contribution by employer, will be credited to (the erstwhile NPS PRAN tagged to UPS), employee’s individual corpus every month.
• An estimated 8.5% contribution (basic pay + DA) by Central Govt in pool corpus on an aggregate basis.
• The UPS, being a ‘fund-based’ system, relies on the regular and timely accumulation and its investment, for assured payout to the employees.
• Investment choice under UPS: Default pattern, 100% G-sec, LC-50 and LC-25.
• Option to change the choice of pension fund once in FY and investment choice twice in FY.
• ‘Default pattern’ of investment will prevail in case such option not exercised by subscriber.

Individual Corpus (IC)

• It is a corpus based on which payout under UPS is calculated.
• Transparently visible to subscriber online as well as in the SOT in the CRA system.
• Value of Benchmark corpus (BC) is based on:
  • Timely & regular contribution (employer and employee in the individual account).
  • Contributions received prior to 1.4.2025, shall be considered as and when they have been received and be valued on default pattern.
  • Investment as per NAV of default pattern.
  • In case of missing contributions, NAV of the last day of the month in which contribution was to be received, shall apply.
• Actual Value of corpus based on:
  • Investment choice made by subscriber.
  • Contribution as and when received.
  • Partial withdrawals will reduce the IC.
  • Voluntary contributions will be added to the IC.
  • Contributions for the period before the commencement of the qualifying service under CG shall be added to the IC.
• If the IC < BC, admissible payout shall be proportionately reduced, unless the shortfall is replenished.
• If the IC > BC, the excess will be transferred to subscriber & full assured payout will be made.

UPS Benefits Availability

UPS benefits shall be available only in the following cases:

• In case of an employee superannuating after qualifying service of ten years, from the date of superannuation.
• In case of the Government retiring an employee under the provisions of FR 56 (j) (which is not a penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965) from the date of such retirement.
• In case of voluntary retirement after a minimum qualifying service period of 25 years, from the date such employee would have superannuated, if the service period had continued to superannuation.
• Notwithstanding enrolment of an employee in the UPS option under NPS, such option shall cease to apply in case of a UPS Subscriber who has been removed or dismissed from service or who has resigned his services.

Qualifying Service

Qualifying service shall be the completed months for which UPS subscriber has rendered regular services under the Central Government, determined by the Head of Office, where such subscriber was employed at the time of superannuation or retirement and in terms of Regulation 13 of the PFRDA (Operationalisation of Unified Pension Scheme under National Pension System) Regulations, 2025.

• It will commence from:
  • Date of joining the NPS for Central Government employees joining service before 1.4.2025.
  • Date of joining UPS for Central Government employees joining service after 1.4.2025.
• The end date of Qualifying service shall be the date of superannuation or retirement, as the case may be.
• Qualifying service shall be the completed months for which UPS subscriber has rendered regular services under the Central Government.
• This shall be determined by the Head of Office where such subscriber was employed at the time of superannuation or retirement.
• If Q < 120, no UPS benefits.
• If Q > 120 but < 300, proportionate assured payouts.
• If Q => 300, full assured payouts.

Various Benefits available under UPS – (To Subscribers retiring after 31.3.2025)

• Lump Sum Payment: Equivalent to 10% or 1/10th of last drawn basic pay (incl. NPA, if applicable) + DA for every completed six months of qualifying service. This lump sum payment will not affect the quantum of assured payout. Will be allowed on the date of superannuation or voluntary retirement or retirement under Fundamental Rules 56(j).
• Assured Payout: Will be @50% of 12 monthly average basic pay, immediately prior to superannuation. Assured payout is payable after a minimum 25 years of qualifying service. In case of lesser qualifying service period, proportionate payout would be admissible.
• Minimum Guaranteed Payout: Rs. 10,000 per month shall be assured in case superannuation is after ten years or more of qualifying service.
• If the IC > BC, the excess will be transferred to subscriber.
• Final Withdrawal (FW): Voluntary withdrawal of up to 60% of corpus in PRAN (IC or BC, whichever is lower) is allowed.
• Admissible Payout: Assured payout shall be proportionately reduced, if IC < BC and/or final withdrawal made. Option to replenish the shortfall in BC is available.
• Family Payout: Will be @60% of the payout to legally wedded spouse as on date of superannuation/retirement.
• Dearness Relief: Will be available on the admissible payout and family payout, as the case may be.

Various Benefits available under UPS (To Subscribers retired Before 31.3.2025)

• Lump Sum Payment: Equivalent to 10% or 1/10th of last drawn basic pay (incl. NPA, if applicable) + DA for every completed six months of qualifying service. This lump sum payment will not affect the quantum of assured payout. Will be allowed on the date of superannuation or voluntary retirement or retirement under Fundamental Rules 56.
• Monthly Top-up: Is payable which is the Difference of the admissible payout and the applicable representative annuity amount for such person computed under this regulation. Monthly Top-up shall be computed utilising such percentage of the individual corpus under NPS Tier I annuitized at the time of exit from NPS. Computation of representative annuity amount for such person shall be based on the annuity rate declared by the Authority.
• Family Payout: Will be @60% of the top-up amount admissible to the deceased subscriber, to legally wedded spouse as on date of superannuation/retirement.
• Dearness Relief: Will be available on the admissible payout and family payout, as the case may be.
• Arrears: For the past period will be paid along with simple interest as per Public Provident Fund rates.

Partial Withdrawals - UPS

• Partial withdrawal from individual corpus is allowed after completion of a lock-in period of 3 years from the date of enrolment under UPS or NPS whichever is earlier, up to a maximum of 3 times in total including the number of partial withdrawals made under NPS.
• Such withdrawals shall be for a maximum of 25% of the own contributions (excluding accretion thereon) made by the Subscriber, as on the date of application for withdrawal.
• Such withdrawal request is allowed for causes as mentioned in Regulation 18 of the PFRDA (Operationalisation of UPS under NPS) Regulations, 2015 and subject to conditions thereof. The grounds for such partial withdrawal are like:
  • for higher education of children,
  • marriage of Children,
  • purchase or construction of house,
  • treatment of illness, medical and incidental expenses arising out of the disability or incapacitation,
  • Skill development.
• If the IC < BC, on account of partial withdrawal, admissible payout shall be proportionately reduced, unless the shortfall is replenished.

Final Withdrawal (FW) under UPS

• Final Withdrawal Percentage:
  1. FW can be availed by the UPS Subscriber or the legally wedded spouse, as the case may be.
  2. Can withdraw an amount upto sixty percent of the individual corpus or benchmark corpus, whichever is lower.
  3. As on the date of:
     • superannuation or
     • voluntary retirement or
     • retirement under Fundamental Rules 56 as may be applicable.
  4. Subject to proportionate reduction in the assured payout payable to such UPS Subscriber.

What benefits available and When payable under UPS to subscriber/Spouse (Past Retirees)

Type of Benefit	UPS subscriber who superannuated/retired on or before 31/03/2025	By spouse (deceased subscriber already availed benefits)	By spouse (deceased subscriber not availed benefits)	Claim Forms
Lumpsum payout (1/10th of last drawn basic pay + DA) for every completed 06 months	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation/retirement, along with interest.	Not applicable	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation/retirement, along with interest.	B2, B4, B6
Final withdrawal amount (maximum 60% of IC or BC, whichever is lower)	Not applicable, as already settled under NPS.	Not applicable, as already settled under NPS.	Not applicable, as already settled under NPS.
Monthly Top-up amount (including DR)	Upon submission of claim form and its authorization by PAO, payable immediately after date of superannuation/retirement, along with arear and interest.	Upon submission of claim form and its authorization by PAO, Monthly Family Pay-out (60 % of top-up amount payable to subscriber), payable immediately after demise of subscriber. Adjustment of excess monthly top up paid for subscriber upto the date of commencement of family payout, if any, shall be made	Upon submission of claim form and its authorization by PAO, Monthly Family Pay-out (60 % of top-up amount payable to subscriber), payable immediately after demise of subscriber. Arrears upto date of commencement of Family Payout (including arrears of monthly top up payout)

What benefits available and When payable under UPS to subscriber/Spouse (Subscribers retiring on or after 01/04/2025)

Type of Benefit	UPS subscriber who superannuated/retired on or after 01/04/2025	By spouse (deceased subscriber already availed benefits)	By spouse (deceased subscriber not availed benefits)	Claim Forms
Lumpsum payout (1/10th of last drawn basic pay + DA) for every completed 06 months	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation/retirement	Not applicable	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation/retirement.	B1, B3, B5
Final withdrawal amount (maximum 60% of IC or BC, whichever is lower)	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation/retirement.	Not applicable	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation/retirement.
Monthly Admissible Payout	Upon submission of claim form and its authorization by PAO, payable immediately after date of superannuation/retirement under FR 56 (j). In case of voluntary retirement payable from the deemed date of superannuation.	Upon submission of claim form and its authorization by PAO, Monthly Family Pay-out (60 % of monthly payout to subscriber), payable immediately after demise of subscriber. Adjustment of excess monthly top up paid for subscriber upto the date of commencement of family payout, if any, shall be made	Upon submission of claim form and its authorization by PAO, Monthly Family Pay-out (60 % of monthly payout payable to subscriber), payable immediately after demise of subscriber. Arrears upto date of commencement of Family Payout (including arrears of monthly payout payable to subscriber)
Excess, if any, of Individual Corpus vis-a-vis Benchmark Corpus	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation	Not applicable	Upon submission of claim form and its authorization by PAO, payable as on date of superannuation

Generic Process followed in processing and release of UPS benefits

1. Submission of claim form by Subscriber/legally wedded spouse as on date of superannuation/retirement of subscriber.
2. Certification of employee’s Pay and Qualifying service by DDO based on certification by HOO.
3. Determination of IC and BC – Generated in the CRA system based on the subscriber data available in CRA system.
4. Up to 31.03.2025, NPS Tier-I balance equals BC, if invested in ‘Default Option’ and no partial withdrawals or voluntary contributions are made.
5. If employee has exercised choice of PF/Investment after 01.04.2019, BC, will be calculated as if the contributions in PRAN were made under NPS default pattern. In such a case if the IC is less than BC, proportionate payout would be admissible.
6. Calculation of Lumpsum based on last pay and completed 6 months of service.
7. Calculation of Assured Payout based last 12 months Average Basic Pay and qualifying months divided by 300. If resultant is less than 10,000 the same should be ignored and considered as 10,000. Thereafter, IC/BC to be applied for deriving admissible payout.
8. Calculation of Admissible Payout based on percentage of corpus withdrawn from NPS Tier-I after superannuation and reduction of assured payout by the same percentage of withdrawals made after superannuation.
9. Replenishing the current value of amount withdrawn from NPS Tier-I after superannuation to be eligible for higher Admissible Payout or Assured Payout.
10. Calculation of DR on admissible payout.
11. Calculation of top up amount based on calculated payout (assured or admissible) reduced by the representative annuity amount derived from corpus annuitized with the representative annuity rate declared by Authority.
12. Calculation of arrears for lumpsum and top up and calculation of simple interest on arrears at PPF applicable rates upto the previous month of submission of claim forms.
13. UPS Order issuance by PAO to NPS Trust and employee.
14. Release of payments by NPS Trust to employees.

Details of UPS Payout Order

• The benefits payable to a UPS Subscriber will be recorded by the respective PAO in a UPS Payout Order as provided in Form B1, B2, B3, B4, B5 or B6(as applicable), and will be sent to the National Pension System Trust through CRA system for authorisation of release of benefits.
• A copy of such UPS Payout Order will also be sent to the UPS Subscriber or the legally wedded spouse as on date of superannuation/retirement (as applicable).
• The UPS Payout Order shall include the following details:
  • details of UPS Subscriber including particulars of legally wedded spouse as on date of superannuation/retirement of such subscriber as appearing in the service records.
  • the period of qualifying service determined by the Head of Office.
  • Details of joint bank account of the UPS Subscriber and legally wedded spouse as on date of superannuation/retirement.
  • final withdrawal percentage ( up to a max 60%) of IC or BC whichever is lower.
  • Top-up amount (Monthly family pay-out - 60 % of top-up amount payable to subscriber).
• Details of benefits applicable under UPS lumpsum payment;
  • value of individual corpus and benchmark corpus as computed by the CRA in its system;
  • assured payout;
  • admissible payout;
  • family payout;
  • applicable dearness relief.
• the date of commencement of admissible payout to subscriber; and
• such other details as may be determined for facilitating payments.

NPS Vs. UPS, an indicative tabulation

Parameter	National Pension System (NPS)	Unified Pension Scheme (UPS)
Eligible employees	Central Govt. employees wef 01.01.2004	- Central Govt. (new joinee 01.04.25) - Existing NPS subscriber of Central Government and - NPS Retirees upto 31.03.3025
Employee Choice	- Mandatory (upto 31st March 2025)	- Choice between NPS and UPS Choice between NPS and UPS to be exercised
Contribution to PRAN	10% employee +14% employer of Basic + DA	10% employee +10% Government (Basic + DA)
Pool Corpus	NA	- Contribution of 8.5% of Basic + DA - Transfer of IC at superannuation
Choice of Pension Fund	YES (Once in a year)	SAME as NPS
Choice of Investments Pattern	YES (Two times in a year)	SAME as NPS
Partial withdrawal	YES (after 3 years, max. 3 times. 25% of self)	SAME as NPS
Voluntary contribution	YES	YES
Lumpsum Payment	NO	1/10th of (last Basic +DA) for each completed 6 months of service
Assured Payout Amount	NO - Based on accumulated corpus (40% mandatory annuity purchase)	YES - 50% average of last 12 months Basic Pay subject to completion of 25 years of service and IC=BC and no final withdrawal.
Minimum Payout	NO	Rs 10,000 + DA subject to 10 years of service and IC=BC
Dearness Relief on Payout	NO	YES.
Lumpsum/final Withdrawal at superannuation	Yes - up to 60% of the total corpus	YES, up to 60% of individual corpus with reduction in payout
Death of employee (receiving payout)	Depends on annuity plan purchased	Spouse will receive 60% of payout received by employee
Annual Life Certificate	Yes – taken by ASPs from subscribers	YES – to be submitted in system (CRA)

Important Videos on Unified Pension Scheme (UPS)

• Instagram: https://x.com/PFRDAOfficial/status/1933466227843678382
• LinkedIn: https://www.linkedin.com/feed/update/urn:li:activity:7339232162077974529
• Facebook: https://www.facebook.com/share/p/1Af9hfuEpf/
• YouTube: https://youtu.be/vNipWpflPZc?si=e1nJZriadJxMlo01

Audio Visuals on UPS

Please note: Specific web links for "Register Aadhar under UPS", "Migration under UPS", and "Register under UPS" are not provided in the original text, only the titles.

• Register Aadhar under UPS
• Migration under UPS
• Register under UPS

Weblinks of Important Documents of UPS

• Government of India Notification on UPS (Website of Ministry of Finance): https://financialservices.gov.in/beta/sites/default/files/2025-02/Gazette_Notification.pdf
• PFRDA (Operationalization of UPS as an Option under NPS) Regulations, 2025 (Website of PFRDA): https://www.pfrda.org.in//MyAuth/Admin/showimg.cshtml?ID=3484
• UPS Calculator (Website of NPS Trust): https://npstrust.org.in/ups-calculator
• FAQs on UPS (Website of PFRDA): https://pfrda.org.in/index1.cshtml?lsid=2441
• Forms (Online & Offline) and SOPs under UPS (Website of CRA): https://enps.nsdl.com/eNPS/UPSOnlineMigration.html, www.npscra.nsdl.co.in/ups.php

Thank You

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