Which is better, NPS or UPS?

UPS gives a guaranteed pension amount, while NPS returns depend on market-linked investments. UPS suits employees who want a risk-free, assured pension. NPS may suit those open to market-based investments for potentially higher returns. Employees who choose UPS also get a one-time option to switch to NPS later if they change their mind.

What is the difference between OPS and UPS pensions?

Under OPS, employees get 50% of their last drawn salary as a pension, with no employee contribution. UPS also offers 50% of the last 12 monthsâ average salary, but only after 25 years of service, and requires employees to contribute 10% of basic salary (with the government contributing 18.5%). For 10 to 25 years of service, UPS gives a pro-rata pension.

Is the UPS scheme available to private employees?

No. UPS is currently limited to central government employees and does not cover private-sector employees.

Does UPS offer a lump-sum pension benefit?

Yes. Retired employees get a lump sum at superannuation, in addition to gratuity. This equals 1/10th of their monthly pay and DA for every six months of completed service. It does not affect the assured pension and is tax-exempt.

What are the tax benefits under UPS?

UPS now has the same tax treatment as NPS. Contributions qualify for deductions under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Income Tax Act. Withdrawals and annuities are covered under Sections 10(12A) and 10(12B). The lump sum paid at superannuation is tax-exempt.

Can I withdraw money from my UPS account before retirement?

Yes. Subscribers can make partial withdrawals of up to 25% of their own contribution (not including returns), up to three times during their service. This is allowed for specific needs such as education, marriage, housing, medical treatment, disability, or skill development.

Unified Pension Scheme (UPS) - Features, Eligibility, Switch Options

The Unified Pension Scheme (UPS) is a new-age pension scheme for government employees. The government of India launched the UPS for providing financial security to retirees. To get a pension under the UPS, government employees must complete at least 25 years of service. Then they receive a pension equal to 50% of their average basic salary drawn in the final 12 months of service. The UPS adds an additional layer of financial safety within the existing NPS ecosystem.

Peaceful Post-Retirement Life
Tax Free Regular Income
Wealth Generation to beat Inflation

4.8⁺⁺ Rated
13.2 Crore Registered Consumer
53 Partners Insurance Partners
6.29 Crore Policies Sold

We are rated⁺⁺

13.2 Crore

Registered Consumer

Insurance Partners

6.29 Crore

Policies Sold

Start Investing ₹10k/Month & Build a corpus of ₹1 Crore^# on Retirement

Your Name

+91

Mobile Number

Your personal information is secure with us

By clicking on ''View Plans'' you, agreed to our Privacy Policy and Terms of use

Get Updates on WhatsApp

What is the Unified Pension Scheme (UPS)?

The Unified Pension Scheme (UPS) is a pension plan designed to strengthen the financial security of government employees. Introduced as an important option under the National Pension System (NPS), its designed to broaden the financial security of retired government employees. The UPS offers a guaranteed pension to subscribers after a minimum of 25 years of government service. Central government employees who complete 25 years of service will get a guaranteed pension equal to 50% of their average basic salary. In the event of the employees death, his/her spouse receives 60% of this pension as a family pension.

Employees get a minimum assured pension of ₹10,000 per month. The government contributes 18.5% of basic pay and dearness allowance (DA). Employees contribute 10% of basic pay and DA. UPS also allows its subscribers to switch to the NPS under certain conditions.

Important Details of the Unified Pension Scheme

Particular	Details
Announced Date	24 August 2024
Implementation Date	1 April 2025
Beneficiaries	Central Government Employees
Employee Contribution	10% of basic salary + DA
Government Contribution	18.5% of basic salary + DA
Assured Pension	50% of the last 12 months average basic salary after 25+ years of service
Minimum Pension	₹10,000 per month (for 10+ years of service)
Family Pension	60% of the pension amount
Inflation Indexing	Pension adjusted based on dearness relief
Tax Benefits	Same as NPS, under Sections 80CCD and 10(12A)/10(12B) of the Income Tax Act

Source: PFRDA; data as of June 2026.

Key Features of UPS

Below are the features of the Unified Pension Scheme (UPS):

Fixed Pension: Employees receive a fixed pension of 50% of their average basic pay over the last 12 months before retirement, after completing 25 years of service.
Pro-rata Pension: For 10 to 25 years of service, the pension is proportionate to the years served.
Family Pension: If the employee passes away, the family receives 60% of the employees pension.
Lump Sum Payment: In addition to gratuity, employees get a lump sum at retirement, calculated as 1/10th of monthly pay and DA for every six months of service.
Minimum Pension: Employees with at least 10 years of service get a guaranteed minimum pension of ₹10,000 per month.
Dearness Relief: Pensioners receive dearness relief based on AICPI-IW, similar to serving employees.
Gratuity: UPS subscribers also get retirement gratuity and death gratuity under the CCS (Payment of Gratuity under NPS) Rules, 2021.
Partial Withdrawal: Subscribers can withdraw up to 25% of their own contribution (excluding returns), up to three times, for education, marriage, housing, medical needs, disability, or skill development.
Voluntary Retirement: Employees can take voluntary retirement after 20 years of qualifying service, with the assured pension paid on a pro-rata basis.

Eligibility Criteria for the UPS-Unified Pension Scheme

The following categories of employees are eligible for UPS:

Existing employees: Central government employees in service as of April 1, 2025, who are covered under the National Pension System (NPS).
New recruits: Employees joining central government service on or after April 1, 2025.
Retired employees: Employees who superannuated, voluntarily retired, or retired under FR 56(j) on or before March 31, 2025, while covered under NPS.
Spouses: The legally wedded spouse of a subscriber who retired and passed away before choosing between UPS and NPS.

State governments can also choose to adopt UPS for their employees. Maharashtra was the first state adopt the UPS for the states government employees, in August 2024.

How to Join the Unified Pension Scheme?

Eligible employees can choose UPS either online through the Protean CRA portal or offline using physical forms. Here is how the process works:

Step 1: Find the right form

Select the valid form, like Form A1 (for new recruits), Form A2 (existing NPS subscribers), Form B1/B2 (employees who have already retired), etc.
Step 2: Get the form

Download the relevant form from the Protean CRA website or collect a physical copy from your office.
Step 3: Fill in your details

Complete the form in English using block letters. You will need your personal details, service details, and bank account information.
Step 4: Enclose required documents

For physical submission, attach proof of bank account such as a cancelled cheque, passbook copy, or bank statement, etc.
Step 5: Submit the form

Submit the completed form to your Drawing and Disbursing Officer (DDO). If applying online, you can fill and submit the form directly through the Protean CRA portal.
Step 6: Confirmation

Once your DDO verifies and processes the form, your UPS account is set up under your existing PRAN (Permanent Retirement Account Number).

How is the Pension Calculated Under the Unified Pension Scheme (UPS)?

The pension under UPS is calculated as follows:

Base Pension: 50% of the average basic pay drawn over the last 12 months before retirement (for 25+ years of service).
Dearness Allowance (DA): The base pension is adjusted periodically for inflation through dearness relief.

Note that the UPS offers a minimum monthly pension of ₹10,000 for government employees who retire with at least 10 years of service.

Contributions Returns on the UPS Scheme

The Unified Pension Scheme (UPS) offers guaranteed pension benefits to government employees. Contributions come from both the employer and the employee:

Government Contribution: 18.5% of basic salary and DA.
Employee Contribution: 10% of basic salary and DA.

Pension Returns:

Employees with 25+ years of service get 50% of their average basic pay over the last 12 months as a pension.
Employees with 10 to 25 years of service get a pro-rata pension, with a minimum of ₹10,000 per month.

UPS vs. NPS - Key Differences

Heres a side-by-side comparison of the key features of the Unified Pension Scheme (UPS) and the National Pension Scheme (NPS):

Feature	UPS	NPS
Eligibility	Central government employees who joined service after January 1, 2004	Any Indian citizen between 18 and 70 years
Pension Type	Defined benefit (guaranteed pension)	Defined contribution (depends on market performance)
Pension Amount	50% of last 12 months average basic salary (after 25+ years)	Depends on accumulated corpus and chosen annuity plan
Government Contribution	18.5% of basic salary	14% of basic salary
Family Pension	60% of the employees pension	Depends on accumulated corpus and chosen annuity plan
Risk	Lower, due to guaranteed pension	Higher, due to market-linked returns
Switch Option	One-time switch to NPS allowed (see below)	Not applicable
Tax Benefits	Same as NPS, under Section 80CCD and Section 10(12A)/10(12B)	Tax benefits under Section 80CCD

Source: PFRDA, data as of June 2026.

Can I Switch from the UPS to the NPS Scheme?

Yes. The government introduced a one-time, one-way switch facility from UPS to NPS in August 2025. Employees who opted for UPS can switch to NPS once but cannot switch back to UPS afterwards.

The switch must be exercised at least one year before superannuation or three months before voluntary retirement. If an employee does not use this option within the given timeline, they continue under UPS by default. The switch is not allowed in cases of dismissal, removal, or compulsory retirement as a penalty or where disciplinary proceedings are pending.

Conclusion

The Unified Pension Scheme (UPS) gives central government employees a secure retirement income through a guaranteed pension, family pension, gratuity, and inflation-protected rates. With tax benefits now applicable with NPS and a one-time

FAQs

Which is better, NPS or UPS?

UPS gives a guaranteed pension amount, while NPS returns depend on market-linked investments. UPS suits employees who want a risk-free, assured pension. NPS may suit those open to market-based investments for potentially higher returns. Employees who choose UPS also get a one-time option to switch to NPS later if they change their mind.
What is the difference between OPS and UPS pensions?

Under OPS, employees get 50% of their last drawn salary as a pension, with no employee contribution. UPS also offers 50% of the last 12 months’ average salary, but only after 25 years of service, and requires employees to contribute 10% of basic salary (with the government contributing 18.5%). For 10 to 25 years of service, UPS gives a pro-rata pension.
Is the UPS scheme available to private employees?

No. UPS is currently limited to central government employees and does not cover private-sector employees.
Does UPS offer a lump-sum pension benefit?

Yes. Retired employees get a lump sum at superannuation, in addition to gratuity. This equals 1/10th of their monthly pay and DA for every six months of completed service. It does not affect the assured pension and is tax-exempt.
What are the tax benefits under UPS?

UPS now has the same tax treatment as NPS. Contributions qualify for deductions under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Income Tax Act. Withdrawals and annuities are covered under Sections 10(12A) and 10(12B). The lump sum paid at superannuation is tax-exempt.
Can I withdraw money from my UPS account before retirement?

Yes. Subscribers can make partial withdrawals of up to 25% of their own contribution (not including returns), up to three times during their service. This is allowed for specific needs such as education, marriage, housing, medical treatment, disability, or skill development.