The Government of India has officially launched the Unified Pension Scheme (UPS) 2025 to ensure a more secure and stable retirement for all government employees across the country. Recently approved by the Union Cabinet, this new pension scheme merges the advantages of both the Old Pension Scheme (OPS) and the National Pension System (NPS). One of the key highlights of the UPS is the increase in the government’s contribution, from 14% to 18.5%, while the employee contribution will remain unchanged. The scheme is expected to benefit around 23 lakh central government employees who will now be eligible to receive benefits under the Unified Pension Scheme.
What is the UPS Unified Pension Scheme 2025
There is a new pension scheme launched by the Government of India for central government employees, whose full name is Unified Pension Scheme, we also know it as UPS Pension Scheme and New Pension Scheme. The 21-year-old National Pension System (NPS) will soon be phased out and is set to be replaced by the Unified Pension Scheme.
The UPS Pension Scheme was approved by the Indian Cabinet on August 24, 2024 and will come into effect from April 1, 2025. UPS Unified Pension Scheme 2024 is an updated version of the pension scheme, this version addresses the emerging needs of government employees and ensures that they get adequate social security during their retirement years.
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Unified Pension Scheme Update
An important statement has been made by the Union Minister, Dr. Jitendra Singh: all the central government employees who are part of the Unified Pension Scheme will also get retirement and death gratuity benefits. This will be accomplished under the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021.
This move fulfills a long-standing demand of many government employees. Dr. Singh said that this change ensures fairness in retirement benefits for all government workers and shows the government’s commitment to provide social security to all employees under the National Pension System (NPS)
UPDATE:- The rules first gave people three months—until 30 June 2025—to join the scheme. But after many people asked for more time, the government decided to extend the deadline.
The Government of India has extended the deadline to choose the Unified Pension Scheme (UPS) by three more months. The new deadline is now 30 September 2025 instead of 30 June 2025. This extension is for eligible current Central Government employees, retired employees, and the legally married spouses of deceased retired employees.
Overview of the Unified Pension Scheme
| Scheme Name | Unified Pension Scheme (UPS) |
| Launched By | Central Government |
| Objective | Provide a Stable Pension Facility |
| Expected number of beneficiaries | 23 lakh |
| Beneficiaries | Government employees of India |
| Total budget | INR 6250 crore |
| Start from | April 1, 2025 |
| UPS Pension Scheme Different from | National Pension Scheme, and Old Pension Scheme |
| Official Website | https://www.epfindia.gov.in/ |
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Key Features of Unified Pension Scheme 2025
Here are the important features of the Unified Pension Scheme:
- Government Contribution Increased: The government’s contribution towards the employee pension will rise from 14% to 18.5%, offering a stronger financial base for retirement.
- No Increase in Employee Contribution: While the government will contribute more, the employee’s contribution will remain the same, ensuring no added financial burden.
- Merged Benefits: The scheme combines the positive aspects of the Old Pension Scheme and NPS, providing more stability and reliability in post-retirement life.
- Gratuity Benefits Included: Employees will receive both retirement and death gratuity, which were not available to all under NPS earlier.
- Large-Scale Benefit: Around 23 lakh government employees will benefit directly from this scheme.
- Allocated Budget: The government has allocated a total budget of ₹6,250 crore for the scheme in its first year of implementation.
Difference Between Unified Pension Scheme, National Pension Scheme, and Old Pension Scheme:
UPS, NPS, and OPS
| OPS | NPS | UPS | |
|---|---|---|---|
| Pension | 50% + DA | The pension amount is not fixed since it is paid based on the return on investments made in market-linked instruments managed by professional fund managers. | 50% + DA |
| Contribution of Employee for Pension | No | Yes (10% of Basic + DA) | Yes (10% of Basic + DA) |
| Gratuity | Yes | Yes | Yes |
| Withdrawal of Commuted Corpus | Whole amount of GPF | Employees can withdraw 60% of the corpus upon retirement, which is tax-free and 40% invested in annuities for getting a pension. | Not mentioned |
| GPF | Yes | No | No |
| Inflation Indexation | Pension increases with the revision of DA twice a year. | No | Pension increases with the revision of DA twice a year. |
| Contributed Money | Can withdraw once in year | No | No |
| Lump Sum Payment | No | No | 1/10th of monthly emoluments (basic + DA) as on the date of superannuation for every completed 6 months service. |
| VRS | Eligible for pension on the Date of VRS | Employee will get only 20% of Commuted Corpus and rest 80% will be invested in annuities for getting a pension. | May eligible for pension only after as on date of actual retirement |
| Minimum Pension | 9000/- + DA (minimum 20 years) | No | 10000 /- + DA after superannuation minimum 10 years of service (it is not mentioned about the minimum pension in case of Death before 10 months |
| Family pension in case of Death during service | 60 % of Basic or 30% of family pension | OPS to family till date of 60 years’ service of deceased employee i.e. 50 % of basic After this, 30% of family pension | 30% of family pension |
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Eligibility Criteria
There are specific eligibility criteria for Unified Pension Scheme. Below, we have told you the eligibility criteria for this scheme:
- The candidate should be a resident of India and only government employees will get the benefit of this scheme
- To get pension under UPS, the employee has to serve for at least 10 years to be eligible for it.
- To avail full pension benefits under UPS, the employee has to serve for at least 25 years and only then he will be able to avail the full benefit.
- The UPS scheme is optional for existing employees under the National Pension System (NPS) and those taking voluntary retirement under NPS.
How to calculate UPS Pension?
As per the UPS calculator for pension scheme, the pension is 50% of the average basic salary received in the last 12 months. The Integrated Pension Scheme formula for contribution is as follows:
- Employees Contribution: 10% of basic salary and DA.
- Government Contribution: 18.5% of the employee’s salary.
UPS Unified Pension Scheme FAQs
What is the UPS Pension Plan?
UPS Unified Pension Scheme is a new pension scheme that provides government employees a pension of 50% of their last 12 months’ income along with certain other benefits.
What is difference between OPS and UPS?
OPS provides a fixed pension based on the last salary received without requiring a contribution from the employees, while UPS requires a 10% contribution from the employees.
NPS or UPS, which is better?
UPS is generally considered better for those who want a guaranteed pension amount, while NPS is more suitable for individuals who are willing to invest in a market-linked system.