The Finance Ministry has announced a
one-time option for central government employees under the Unified Pension Scheme (UPS) to switch back to the National Pension System (NPS). Here's everything you need to know.
1. Deadline is Set: Act Before september 30, 2025
Employees have until
September 30, 2025, to exercise this one-time switch. After this date:· Those who remain in NPS cannot move to UPS.· Those who move to NPS cannot return to UPS.
It’s a
single-use, permanent option, so careful consideration is crucial.
2. Who Can Switch?
The switch is allowed:·
One year before retirement or
three months before voluntary retirement·
Not eligible: Employees facing dismissal, compulsory retirement, or disciplinary actionThose who miss the deadline will
automatically stay under UPS.
3. Understanding the Unified Pension Scheme (UPS)
Introduced on
April 1, 2025, UPS offers:·
Guaranteed minimum pension: Rs 10,000 per month for employees completing at least 10 years of service·
Spousal benefit: 60% of last payout goes to the legally wedded spouse after the employee’s death·
Eligibility caveats: No pension if the employee resigns, is dismissed, or retires before completing 10 yearsUPS provides security with a
fixed retirement benefit, unlike the market-linked NPS.
4. Why This Switch Matters
Many employees had expressed concerns about being
locked into UPS without flexibility. The one-time switch gives:·
Clarity on long-term pension needs· A chance to
choose the retirement option best suited to financial goalsEmployees can now weigh
assured UPS payouts versus the
market-linked growth of NPS before making a permanent decision.
5. Key Takeaways for government Employees
·
Deadline: september 30, 2025·
One-time, permanent choice—think carefully before acting·
UPS benefits: Guaranteed minimum pension and spousal support·
NPS benefits: Potentially higher returns but market-linked·
Act wisely: Missing the window means staying in UPS with no future switch optionWith this decision, the government aims to give employees
greater flexibility and control over their retirement planning, ensuring they can choose a scheme that data-aligns with their long-term financial needs.
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