The central government has made efforts to give ease and stability in pension management to employees under the Integrated Pension Scheme (UPS). But the last date for joining this scheme has now been extended by 30 November 2025 so that employees can get enough time to choose UPS. The slow response of the employees behind this change and their questions were whether they can also take NPS (National Pension System) with UPS.
What is UPS?
UPS has been started especially for those employees of the central government who have come in service after 1 January 2004. This scheme is different from the traditional pension system, in which the government also contributes the monthly contribution of the employees. Both of these are mixed in pension funds and during service, the pension amount is fixed on the basis of contribution and service period. The UPS provides a certain and reliable pension to the employees which are found in the form of regular monthly income.
What is NPS?
The NPS ie National Pension System is an open scheme for all citizens of India. It has two types of accounts Tier-1 and Tier-2. Tier-1 account is the main pension account, where investment remains locked for a long time and withdrawal after retirement. At the same time, Tier-2 account is more flexible for investment and withdrawal and it can also be used for tax planning. Government employees are essentially involved in Tier-1 under NPS, but the option of UPS is also present for them.
Can you invest in both UPS and NPS?
This question is in the mind of many government employees, so the answer is yes, but with some conditions. Employees can choose UPS as well as open NPS account, but NPS account should be under All Citizen Model. That is, there is no restriction from joining the NPS. This facility gives government employees more flexible and better investment options.
Pension Fund Regulatory and Development Authority (PFRDA) has also confirmed this on its official portal. He says that UPS customers are allowed to open Tier-1 and Tier-2 of NPS on voluntary basis. This means that employees taking UPS can invest their pension funds in different schemes and make better financial security for the future.