The Unified Pension Scheme (UPS) has been introduced by the Central Government as an option under the National Pension System (NPS) for its employees, effective from April 1, 2025. This blog post provides a comprehensive set of Frequently Asked Questions (FAQs) designed to help Central Government employees understand the key aspects of the UPS. It covers eligibility criteria, enrollment procedures, contributions, investment options, benefits, payout calculations, and other important operational details. It aims to offer clarity and guidance to employees in making informed decisions regarding their pension options.
I. UPS Overview
1. What is the Unified Pension Scheme (UPS)?
The Unified Pension Scheme (UPS) is an option under the National Pension System (NPS) introduced by the Central Government for its employees, effective from April 1, 2025. It offers assured payouts based on specific conditions.
2. Who is eligible to opt for UPS?
Eligibility varies depending on employment status:
i) Existing Central Government employees covered under NPS as of April 1, 2025, are eligible.
ii) Newly recruited Central Government employees joining service on or after April 1, 2025, are eligible.
iii) Certain retired Central Government employees who were covered under NPS and meet specific criteria are also eligible, including those who:
a) Superannuated after a minimum of 10 years of qualifying service.
b) Retired under Fundamental Rules 56(j) (not considered a penalty).
c) Legally wedded spouse of a deceased subscriber eligible under UPS.
II. Enrollment Process
3. Which forms are required for UPS enrollment?
The required forms depend on the employee’s situation:
i) Form A1: For newly recruited Central Government employees joining service on or after April 1, 2025.
ii) Form A2: For existing Central Government employees currently under NPS opting for UPS.
4. Where can I obtain the UPS enrollment forms?
Forms A1 and A2, along with instructions and a list of required documents, can be downloaded from the Protean CRA website.
5. What are the deadlines for opting into UPS?
The deadlines to exercise the option for UPS vary:
i) Existing employees (as of March 31, 2025): Within three (3) months from April 1, 2025, or any extended period allowed by the Central Government.
ii) Retired employees (as of March 31, 2025): Within three (3) months from April 1, 2025, or any extended period allowed by the Central Government.
iii) Legally wedded spouse (of a deceased subscriber): Within three (3) months from April 1, 2025, or any extended period allowed by the Central Government.
iv) New recruits (joining on or after April 1, 2025): Within thirty (30) days from the date of joining Central Government services, or any extended period allowed by the Central Government.
6. Can the UPS option be changed later?
No, the decision to opt for UPS is final and cannot be changed.
7. What happens if an employee misses the UPS option deadline?
If an eligible person does not opt for UPS within the specified timeframe, they will be considered to have chosen to continue under NPS without the UPS option.
8. What is a Permanent Retirement Account Number (PRAN) under UPS?
PRAN is a unique number assigned to each UPS subscriber, used by the CRA system to record all transactions.
9. Where should the UPS option form/account opening forms be submitted?
The form can be submitted online or in person to the Head of Office/DDO where the subscriber is employed.
10. Is there an online enrollment process for UPS?
Yes, subscribers can submit their enrollment request online by completing the necessary forms through the CRA website.
11. What is considered “qualifying service” under UPS?
Qualifying service refers to the completed months a UPS subscriber has worked under the Central Government, as determined by the Head of Office, according to Regulation 13 of the PFRDA regulations.
12. How can a subscriber check the status of their UPS application?
Subscribers can check their application status through the CRA and their respective Nodal Office.
13. Can UPS subscribers also have voluntary NPS Tier-I/II accounts?
Yes, UPS subscribers can choose to maintain NPS Tier-I and Tier-II accounts under the “All Citizen Model” in addition to their UPS account, all within the same PRAN.
III. Contributions and Investments
14. What happens to my existing NPS corpus when I switch to UPS?
When you migrate from NPS to UPS, your existing corpus will be transferred to the PRAN associated with your UPS account.
15. Will a new PRAN be issued when migrating from NPS to UPS?
No, your existing PRAN will be used to identify you under UPS.
16. What are “Individual Corpus” and “Benchmark Corpus”?
i) Individual Corpus: The actual value of the funds in a subscriber’s PRAN under UPS.
ii) Benchmark Corpus: A notional value calculated by the CRA for comparison with the Individual Corpus, based on the default investment. (For more details, refer to Regulation 12 and the illustrations in the Schedules to the Regulations)
17. Can employees choose their pension fund and investment pattern under UPS?
Yes, employees can select from registered pension funds and investment patterns, including the default options defined by PFRDA.
18. What happens if an employee doesn’t choose a pension fund?
If an employee does not select a pension fund, they will be assigned the default pension fund and investment pattern defined by PFRDA.
19. What investment choices are available besides the default pattern?
Subscribers can choose to invest:
i) 100% of their funds in Government securities (Scheme G).
ii) In one of the following Life Cycle based schemes:
a) Conservative Life Cycle Fund (LC-25): Maximum 25% exposure to equity.
b) Moderate Life Cycle Fund (LC-50): Maximum 50% exposure to equity.
20. How often can I change my pension fund and investment choice?
UPS subscribers can change their pension fund choice once per financial year and their investment choice twice per financial year.
21. Will subscribers receive updates on their corpus value?
Yes, the CRA will provide details of the Individual Corpus and Benchmark Corpus in the PRAN account statement periodically.
IV. Benefits and Payouts
22. How is the assured payout calculated under UPS?
The full assured payout is 50% of the average basic pay of the 12 months immediately before superannuation, payable after a minimum of 25 years of qualifying service. Proportionate payout is admissible for a lesser qualifying service period.
23. When does the payout start in case of voluntary retirement?
For voluntary retirement after a minimum of 25 years of qualifying service, the assured payout will begin from the date the employee would have superannuated if they had remained in service.
24. What is the minimum guaranteed payout under UPS?
A minimum guaranteed payout of Rs. 10,000 per month is provided after completing 10 years of service.
25. Will the assured payout be reduced if the qualifying service is less than 25 years?
Yes, if the qualifying service is ten years or more but less than twenty-five years, a proportionate payout will be payable.
26. What is “Admissible Payout”?
Admissible Payout is the assured payout, reduced proportionally. The formula for calculation is:
Admissible Payout = Assured Payout x (IC/BC) x (1 – FW%)
Where:
IC = Individual Corpus value
BC = Benchmark Corpus value (with the condition that IC ≤ BC)
FW = Final withdrawal in percentage points (maximum up to 60% of IC or BC, whichever is lower).
27. What is “Family Payout” under UPS?
Upon the death of a UPS subscriber receiving admissible payout or a top-up amount, the legally wedded spouse will receive a family payout for life, equal to 60% of the admissible payout or top-up amount the subscriber was receiving before death.
28. What benefits are available under UPS to employees who retired under NPS on or before March 31, 2025?
Eligible employees will receive:
i) Lump-sum payment.
ii) Monthly top-up amounts, starting after the date of superannuation or retirement.
iii) Applicable dearness relief.
iv) Simple interest as per applicable Public Provident Fund rates on arrears related to the above benefits, from the month after superannuation up to the month before submitting claim forms. No interest is payable beyond the last date for submitting the option or claim.
These benefits are in addition to any benefits availed or accrued under NPS, including annuity.
29. How is the monthly top-up amount calculated for employees who retired on or before March 31, 2025, and are receiving an annuity under NPS?
The monthly top-up amount is calculated as:
Monthly Top-up = (Admissible Payout + Dearness Relief on Admissible Payout) – Representative Annuity Amount
30. What is the Representative Annuity rate and amount?
Representative Annuity rates for January 2014 to March 2025 are in Schedule VI of the PFRDA regulations.
Representative Annuity Amount = (IC) x (1 – FW%) x (Representative Annuity Rate) / (12 x 100) where IC ≤ BC.
31. Who is eligible to receive assured payouts under UPS?
Assured Payouts are available in the following situations:
i) Employees superannuating after 10 years of qualifying service, from the date of superannuation.
ii) Employees retired by the Government under FR 56(j) (not a penalty), from the date of retirement.
iii) Employees with voluntary retirement after 25 years of service, from the date they would have superannuated.
32. Who can claim the family payout under UPS?
The legally wedded spouse of the deceased UPS subscriber, whose name is in the service records as of the date of superannuation, voluntary retirement, or retirement under Fundamental Rules 56(j), and who is alive, is eligible for the family payout.
33. Is a spouse married after the date of superannuation eligible for the family payout?
No, only the legally wedded spouse as of the date of superannuation is eligible for the family payout.
34. Is there a lump-sum payment provision under UPS?
Yes, a lump-sum amount equal to one-tenth of the last drawn basic pay (plus NPA and DA) is paid for every completed 6-month period of qualifying service.
35. Can I withdraw an amount under UPS at retirement, and if so, how much?
UPS subscribers can opt for a final withdrawal of up to 60% of the Individual Corpus or Benchmark Corpus (whichever is lower) available in their PRAN on the date of superannuation, voluntary retirement, or retirement, subject to a proportionate reduction in the assured payout.
36. How is the final withdrawal amount calculated if the Individual Corpus is greater than the Benchmark Corpus?
The final withdrawal is limited to 60% of the Benchmark Corpus.
37. When is the final withdrawal admissible?
The final withdrawal is allowed on the date of superannuation, voluntary retirement, or retirement under Fundamental Rules 56(j).
38. How is Dearness Relief applied under UPS?
Dearness Relief, as declared by the Central Government, will be applicable to admissible payout and family payout, but only when admissible payout commences.
39. Are UPS benefits payable if the employee has been removed, dismissed, or resigned from service?
No, assured payouts are not available in cases of removal, dismissal, or resignation. The UPS option does not apply in these situations.
40. Can a subscriber make partial withdrawals during the service period?
Yes, partial withdrawals of up to 25% of self-contribution (excluding returns) are allowed after a lock-in period of three years from the date of enrollment under UPS or NPS (whichever is earlier), for specific purposes.
41. What are the allowed purposes for partial withdrawal under UPS?
Permitted purposes include higher education of children, marriage of children, purchase/construction of a residential house, medical emergencies, disability-related expenses, and skill development.
42. How many times can partial withdrawals be made under UPS?
A maximum of three partial withdrawals are allowed, including any withdrawals made under NPS before opting for UPS.
43. Can a subscriber replenish a partial withdrawal made under UPS?
Yes, subscribers can replenish the amount partially withdrawn before retirement.
V. Operational Issues
44. How are UPS benefits claimed after retirement/death of the subscriber?
The subscriber or the legally wedded spouse must submit the relevant application forms to the Head of Office or DDO.
45. Which form should be submitted to claim UPS benefits?
The form to be submitted depends on the condition:
i) Form B1: To be submitted by a subscriber who superannuated or retired on or after 1st April 2025.
ii) Form B2: To be submitted by a subscriber who superannuated or retired on or before 1st April 2025.
iii) Form B3: To be submitted by the spouse of the deceased subscriber who superannuated or retired on or after 1st April 2025 and eligible for UPS benefits and subscriber had already availed benefits under UPS.
iv) Form B4: To be submitted by the spouse of the deceased subscriber who superannuated or retired on or before 31st March 2025 and eligible for UPS benefits and subscriber had already availed benefits under UPS.
v) Form B5: To be submitted by the spouse of the deceased subscriber who superannuated or retired on or after 1st April 2025and eligible for UPS benefits and subscriber had not availed benefits under UPS.
vi) Form B6: To be submitted by the spouse of the deceased subscriber who superannuated or retired on or before 31st March 2025 and eligible for UPS benefits and subscriber had not availed benefits under UPS.
46. What is a UPS Payout Order (UPO)?
The UPS Payout Order (UPO) contains details of the benefits payable to a UPS subscriber.
47. Who will authorize the UPS payout order?
The respective PAO authorizes the UPO and sends it to the National Pension System Trust through CRA. A copy of the UPO is provided to the UPS subscriber or the legally wedded spouse.
48. How are UPS benefits paid out?
i) Upon receiving the UPO and any final withdrawal option from the subscriber, the National Pension System Trust authorizes the release of UPS benefits and the transfer of the remaining balance in the individual corpus to the pool corpus.
ii) The National Pension System Trust ensures the monthly payout from the Pool Corpus to the subscriber’s bank account and the periodic release of applicable dearness relief. The CRA instructs the pension fund to facilitate redemption from the Pool Corpus for these payments.
Disclaimer:
This set of FAQs is for informational purposes only and is based on the PFRDA (Operationalisation of UPS under NPS) Regulations, 2025. It is not a substitute for official regulations, circulars, or notifications issued by the Pension Fund Regulatory and Development Authority (PFRDA) or the Government of India. Users should refer the relevant statutory documents and seek professional guidance for specific queries or decisions.
FAQs on UPS under NPS for Central Govt Employees dated 30/03/2025
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