From April 1, 2025, employees under the National Pension Scheme (NPS) can shift to the Unified Pension Scheme (UPS), which offers guaranteed pension benefits, government contributions, and better investment options.
The goal of the UPS is to provide enhanced social security for central government employees after retirement.
Here’s everything you need to know about UPS and the process to migrate from NPS to UPS.
What is the Unified Pension Scheme (UPS)?
The UPS has been introduced to replace the Old Pension Scheme (OPS) that provided a guaranteed pension.
UPS brings back a similar concept with some changes and improvements:
Guaranteed Pension: Based on years of service.
25+ years of service: 50% of the average basic salary of the last 12 months.
10 to 25 years of service: Proportional pension based on service length.
At least 10 years of service: Guaranteed pension of ₹10,000 per month.
Pension for Spouse: In case of the pensioner’s death, the spouse will continue to receive 60% of the pension.
In the UPS, employees contribute 10% of their basic salary + dearness allowance (DA), and the government contributes the same amount.
This results in a total contribution of 20% of the salary into the pension scheme.
How Will the Pension Be Paid?
After retirement, employees will receive a monthly pension from their accumulated funds, similar to the Systematic Withdrawal Plan (SWP) of mutual funds.
If the funds are exhausted, the government will continue making payments from a common pool to ensure pension continuity.
How to Migrate from NPS to UPS
The migration from NPS to UPS is a straightforward process. Follow these steps:
Visit the UPS Website: Go to the official site for UPS migration: https://npscra.nsdl.co.in/ups.php.
Select the Appropriate Option:
Register for UPS: If you’re new to UPS, choose the “Register for UPS” option.
Migrate to UPS: If you’re an existing NPS subscriber and want to migrate to UPS, select the “Migrate to UPS” option.
Verify Your PRAN (Permanent Retirement Account Number): Enter the required details to verify your PRAN. This is necessary to complete the migration process.
Complete the Migration: Once you’ve verified your PRAN, your migration from NPS to UPS will be complete.
Offline Process for Migration:
If you prefer the offline method, you can submit a physical application by filling out the relevant form.
Availability of UPS:
Currently, the Unified Pension Scheme is available only to central government employees. State governments will decide later whether they will adopt the scheme.
Key Benefits of UPS:
Guaranteed Pension: Based on years of service, with a guaranteed minimum pension of ₹10,000 for employees with at least 10 years of service.
Government Contribution: The government matches employee contributions, providing an additional boost to the pension fund.
Spousal Benefits: A spouse will continue to receive 60% of the pension if the pensioner passes away.
Better Investment Options: Employees can choose between default government-managed funds or opt for private pension fund managers (PFM).
