Unified Pension Scheme (UPS): Assured Pension for Central Government Employees
Last updated: 2026-11-13 · MockMentor
The Unified Pension Scheme (UPS), effective 1 April 2025, is an option within NPS for Central Government employees. It adds an assured payout, like the Old Pension Scheme, while keeping NPS's contributory design.
In one line: contributory like NPS, but with a guaranteed pension of 50% of the last year's average basic pay after 25 years of service.
At a glance
| Item | Details |
|---|---|
| Effective | 1 April 2025 |
| Who | Central Government employees under NPS; States may adopt it |
| Employee contribution | 10% of basic pay + DA |
| Government contribution | 18.5% (10% to the individual account + 8.5% to a pooled corpus) |
| Assured pension | 50% of average basic pay of the last 12 months, for 25 years of service |
| Minimum pension | ₹10,000 a month after 10 years |
| Family pension | 60% of the employee's pension, to the spouse |
Other features
- Inflation protection: Dearness Relief linked to the All India Consumer Price Index for Industrial Workers (AICPI-IW).
- Lump sum at retirement: one-tenth of monthly pay plus DA for every six months of service, without cutting the pension.
- Pro-rata pension for 10 to 25 years of service.
- One-time choice: existing NPS employees can switch to UPS or stay in NPS; new recruits choose at joining.
- Those who retired under NPS since 2004 can also claim UPS benefits, adjusted for past withdrawals.
OPS vs NPS vs UPS
| Feature | OPS | NPS | UPS |
|---|---|---|---|
| Type | Defined benefit, unfunded | Defined contribution | Assured, funded |
| Contribution | None by employee | 10% employee + 14% Government | 10% employee + 18.5% Government |
| Pension | 50% of last pay | Market-linked | 50% of last 12 months' average pay |
| Inflation protection | Yes | No | Yes |
Possible exam questions
- Does the Unified Pension Scheme strike the right balance between employees' security and fiscal prudence?
- Why did several States return to the Old Pension Scheme, and what are its fiscal risks?
Complete notes in our courses: this page gives the essentials. The Super-Elite and Elite courses carry the full chapter with every update merged in, plus practice MCQs. Compare the courses.
More in Finance Ministry schemes
- National Pension System (NPS)
- Atal Pension Yojana (APY)
- PM Vaya Vandana Yojana (PMVVY)
- PM Jeevan Jyoti Bima Yojana (PMJJBY)
- PM Suraksha Bima Yojana (PMSBY)
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