Sun Jan 26 07:20:08 UTC 2025: ## Unified Pension Scheme to Launch April 1, 2025
**New Delhi, January 25, 2025** – The Indian government has officially notified the Unified Pension Scheme (UPS), a move that will significantly impact central government employees. The scheme, announced last August, will replace the existing National Pension System (NPS) for eligible employees, offering a guaranteed pension upon retirement. The UPS will come into effect on April 1, 2025, coinciding with the upcoming Union Budget presentation on February 1st.
The UPS aims to balance the old pension scheme (OPS) and the NPS, providing financial security for retirees. Central government employees currently under the NPS will have the option to switch to the UPS. Those who choose to remain with the NPS will not be eligible for the UPS benefits. The government clarified that opting for the UPS excludes any other policy concessions or financial benefits.
The UPS guarantees a pension equal to 50% of an employee’s average basic salary over the last 12 months of service, provided they have served a minimum of 25 years. This pension will be adjusted for inflation (Dearness Relief). In case of death, a designated family member will receive 60% of the pension. Employees with 10 or more years of service will receive a minimum pension of ₹10,000. The scheme also includes a lump-sum payment at retirement, calculated based on the employee’s salary and Dearness Allowance, though this gratuity may be less than under the OPS.
The government’s contribution to the UPS will be 18.5% of an employee’s basic salary, compared to the 14% under the NPS. This increased contribution is estimated to add an additional ₹6250 crore to government expenditure in the first year. Approximately 2.3 million central government employees stand to benefit from the implementation of the UPS.
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