Understanding the Applicability of the Unified Pension Scheme (UPS) as per Gazette Notification Dated 19.03.2025

 Understanding the Applicability of the Unified Pension Scheme (UPS) as per Gazette Notification Dated 19.03.2025

The Government of India has issued a Gazette Notification dated March 19, 2025, introducing the Unified Pension Scheme (UPS). This scheme aims to provide a structured pension system for eligible Central Government employees. Below is a detailed look at the Applicability of the Unified Pension Scheme and options available under the UPS.

Applicability of the Unified Pension Scheme

Who Can Avail the Benefits of the Unified Pension Scheme?

The option to avail benefits under the UPS is available to the following categories of individuals:

1. Existing Central Government Employees

Employees currently in service as of April 1, 2025, and covered under the National Pension System (NPS) as per Section 20(1) of the Act, are eligible to opt for UPS.

2. New Central Government Recruits

Individuals who join Central Government services on or after April 1, 2025, will be automatically covered under the UPS.

3. Retired or Voluntarily Retired Employees & Spouses

The following individuals can also opt for the UPS:

• Central Government employees who were covered under the NPS and who have superannuated, voluntarily retired, or retired under Fundamental Rules 56(j) on or before March 31, 2025. (Note: Retirement under FR 56(j) must not be treated as a penalty under the Central Civil Services (Classification, Control, and Appeal) Rules, 1965.)
• The legally wedded spouse of a deceased subscriber who had superannuated or retired before exercising the option for UPS.

Timeline for Exercising the Option

Eligible employees must exercise their option to be covered under the UPS within the specified timelines:

For existing Central Government employees (Category 1) and retired employees (Category 3):

• Within three months from April 1, 2025, or any extended timeline allowed by the Central Government.

For new recruits in Central Government services (Category 2):

• Within 30 days from the date of joining, or within any extended timeline provided by the Central Government.

Finality of the Option

Once an eligible individual opts for the UPS, the decision is final and irrevocable. This ensures commitment to the new pension framework without the possibility of reconsideration.

The introduction of the Unified Pension Scheme marks a significant shift in the pension framework for Central Government employees. Whether you are a current employee, a new recruit, or a retired personnel, it is crucial to understand the implications of opting for UPS within the stipulated timelines. Stay informed and make the best decision for your financial future.

For further details, employees are advised to refer to the official notification or consult their respective HR departments.

• The Applicability part Chapter I of Gazette Notification is reproduced below

Applicability of the Unified Pension Scheme. – (1) The option to avail benefits under UPS shall be available to the following category of persons–

(i) An existing Central Government employee in service as on 1st April 2025, who is covered under NPS, in terms of subsection (1) of section 20 of the Act;

(ii) A new recruit in the Central Government services, who joins service on or after the 1st day of April 2025;

(iii) (a)A Central Government employee who was covered under NPS and who has superannuated or voluntarily retired or has retired under Fundamental Rules 56(j) (which is not treated as penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965), on or before 31st March 2025; or

(b) the legally wedded spouse in case of a subscriber who has superannuated or retired and has demised prior to exercising the option for UPS.

(2) The exercise of option in respect of an eligible employee to be covered under UPS shall be undertaken: –

(i) within three months from 1st April 2025, or within such extended timelines if any, allowed by the Central Government, in respect of a person mentioned under clause (i) and clause(iii) of sub-regulation (1); and

(ii) within thirty days, from the date of joining Central Government services or within such extended timelines, if any, allowed by the Central Government, in respect of a person mentioned under sub-clause (ii) of sub-regulation (1)

(3) The option once exercised shall be final and irrevocable.

Operationalisation Of Unified Pension Scheme Under National Pension System

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
NOTIFICATION
New Delhi, the 19th March ,2025

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY (OPERATIONALISATION OF UNIFIED PENSION SCHEME UNDER NATIONAL PENSION SYSTEM) REGULATIONS, 2025

F. No. PFRDA-12/01/0001/2023-LEGAL.—In exercise of the powers conferred by sub-section (1) of Section 52 read with clauses (f)and (w) of sub-section (2) thereof, of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013), the Pension Fund Regulatory and Development Authority hereby makes the following regulations to operationalise the Unified Pension Scheme(UPS) introduced by the Central Government as an option under the National Pension System (NPS) for the employees of the Central Government who are covered under NPS, namely:

CHAPTER I
PRELIMINARY

1.Short Title and Commencement. -(1) These regulations may be called the Pension Fund Regulatory and Development Authority (Operationalisation of Unified Pension Scheme under National Pension System) Regulations, 2025.

(2) The objective of these regulations is to lay down the framework to operationalise the UPS notified by the Central Government in the Ministry of Finance vide notification number F. No. FX-1/3/2024-PR, dated the 24th January 2025, and to define the obligations, roles and responsibilities of intermediaries and such Central Government offices as are involved with implementation thereof, and for matters connected therewith or incidental thereto.

(3) These regulations shall come into effect from 1st April 2025.

2.Definitions. – (1) In these regulations, unless the context otherwise requires,-

• (a) “Act” means the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013);
• (b) “Authority” means the Pension Fund Regulatory and Development Authority established under sub-section (1) of section 3 of the Pension Fund Regulatory and Development Authority Act, 2013;
• (c) “Admissible Payout” means the amount payable to a UPS subscriber for life, in such proportion and in such manner as specified under these regulations;
• (d) “Benchmark Corpus” means a corpus as specified under regulation 12;
• (e) “Default pattern” means such choice of pension fund(s) and of investment pattern(s), as may be determined by the Authority in respect of individual corpus under UPS, from time to time;
• (f) “Family Payout” means the monthly amount payable to the legally wedded spouse of a deceased subscriber;
• (g) “Head of Office” means a Gazetted Officer as defined under the Delegation of Financial Powers Rules,2024, issued by the Central Government, and includes such other authority or person whom the Central Government may, by order, specify as Head of Office;
• (h) “Individual Corpus” means the net asset value of units outstanding in the individual Permanent Retirement Account Number (PRAN)of a subscriber;
• (i) “Legally wedded spouse” means the spouse of a subscriber whose name appears as such in the service records as on the date of superannuation or voluntary retirement or retirement under Fundamental Rules 56(j) (which is not treated as penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965), as may be applicable, and who is surviving the deceased subscriber;
• (j) “Pool Corpus” means the fund specified under regulation 7;
• (k) “Qualifying Service” means the period of service in respect of a UPS subscriber, as determined in the manner specified under regulation 13;
• (l) “Schedule” means the schedules appended to these regulations;
• (m) “Unified Pension Scheme (UPS)” means an option available to employees of Central Government, who are covered under the NPS, in terms of the UPS Notification;
• (n) “UPS Notification” means the notification bearing number F. No. FX-1/3/2024-PR, dated the 24th January 2025,issued by the Department of Financial Services, Ministry of Finance;
• (o) “UPS Payout Order” means authorisation issued by the Pay and Accounts Officer (PAO) to National Pension System Trust containing such details as provided under regulation 20;
• (p) “UPS Subscriber” for the purpose of these regulations shall mean a Central Government employee who opts for and is enrolled under UPS in accordance with these regulations.

(2) Words and expressions used herein and not defined under these regulations, shall have the same meaning as defined under the Act and the existing regulations made thereunder.