Unified Pension Scheme: The Ministry of Finance has appealed to government employees to opt for the United Pension Scheme (UPS) before the September 30, 2025, deadline.
The government implemented UPS under the National Pension System (NPS) from April 1st, 2025, providing a fixed pension and retirement benefit. Employees can make a one-time switch from UPS to NPS. 31,555 employees have already joined. It is important to opt for the option before the deadline to ensure the timely disbursement of benefits.
Unified Pension Scheme: The Central Government has made a major decision regarding pensions for its employees. The Ministry of Finance has appealed to all government employees to opt for the United Pension Scheme (UPS) before the September 30, 2025, deadline so that their applications can be processed on time and they do not face any difficulties in the future. Most importantly, if this option is not chosen within the stipulated deadline, government employees will not get a second chance.
UPS Option for Employees Joining NPS
The government launched the United Pension Scheme (UPS) under the National Pension System (NPS) from April 1, 2025. Under this, employees will receive a fixed pension. Eligible employees enrolled in NPS and retired employees can opt for UPS until September 30, 2025. The ministry states that if an employee chooses to remain in NPS, they will not be able to join UPS after the deadline. Therefore, all eligible employees have been advised to clarify their decision before the deadline.
How many employees have chosen UPS?
According to government data, approximately 31,555 central government employees have joined UPS as of July 20, 2025. The ministry believes that last-minute opting may face technical and administrative hurdles. Therefore, a quick decision will be in the best interest of employees.
Facility to Switch from UPS to NPS
The Ministry of Finance made another important announcement on August 25, 2025. The Ministry stated that employees who opted for UPS will be given a one-time option to switch back to NPS. However, this option will be available only once. Once they have switched to NPS, they will not be allowed to switch back to UPS.
When can one switch?
According to the Ministry, employees switching from UPS to NPS can exercise this option at any time, provided it is one year before their retirement date or three months before the due date in the case of voluntary retirement. This provision has been made so that employees can plan their future in a systematic manner.
Benefits of UPS
The government has provided several important benefits under UPS. These include the provision of retirement death gratuity, the option to receive benefits under the Central Civil Services (CCS) Pension Rules, 2021 or the Extraordinary Pension Rules, 2023, and a guaranteed fixed pension in case of death, disability, or incapacity during service. This will provide financial security to employees after retirement.
Tax Benefits Will Also Be Available
The Finance Ministry has clarified that UPS will be provided with tax benefits under the Income Tax Act, 1961, similar to NPS. This means that employees opting for UPS will also be able to avail tax exemptions and other financial benefits.
Why is a timely decision necessary?
The Ministry stated in its statement that employees may face technical glitches and processing delays if they apply at the last minute. Making a timely choice will ensure that their pension process proceeds smoothly.
Government’s Objective
Experts believe that the government introduced UPS to provide employees with the security of the old pension and the flexibility of NPS. This move will provide relief to employees who have long been demanding a fixed pension.
September 30th is Important for Government Employees
It is clear that the September 30th, 2025 deadline is extremely important for government employees. Opting for UPS early will not only avoid administrative hassles but also ensure financial security after retirement. The Finance Ministry has clarified that the decision is entirely up to employees; they can remain in the NPS or opt for UPS. However, if the deadline is missed, they will not receive a second chance.