- 50%Of basic pay, after 25 years
- ₹10,000Minimum a month, after 10 years
- 60%Family payout to the spouse
- YesDearness relief on the payout
What is the Unified Pension Scheme?
The Unified Pension Scheme (UPS) is a pension option for central government employees. It works inside the National Pension System (NPS) and is regulated by PFRDA, the pension regulator. The Cabinet approved it on 24 August 2024, PFRDA notified its rules on 19 March 2025, and it started on 1 April 2025.
Under NPS, your pension depends on the market. Under UPS, you still save in an NPS account, but the government promises a fixed payout linked to your last basic pay. The payout gets dearness relief (DR), so it goes up when DA goes up. By mid-July 2026, about 1.18 lakh employees had chosen UPS.
- Step 1Save while you workYou pay 10% of basic + DA. The government adds 10% to your account and about 8.5% to a pool.
- Step 2Get a lump sumOn retirement, 1/10 of your last basic + DA for every six months of service.
- Step 3Get a payout for life50% of your average basic pay after 25 years, with dearness relief. Then 60% to your spouse.
Example: Meena, retiring at 60. She has 28 years of service. Her average basic pay in the last 12 months is ₹1,20,000. Her service is more than 25 years, so she gets the full 50%. DA is 60% today, so dearness relief adds ₹36,000.
- Payout a month
- ₹60,000
- With dearness relief
- ₹96,000
- Lump sum on retirement
- ₹10,75,200
Some states, such as Maharashtra, Haryana and Assam, have announced their own UPS for state employees, with their own rules. This page covers the central government UPS.
Who can choose UPS? Eligibility
- Yes: Central government employees in service on 1 April 2025 who are covered by NPS (joined on or after 1 January 2004)
- Yes: New central government employees who joined on or after 1 April 2025, within 30 days of joining
- Yes: NPS subscribers who retired on or before 31 March 2025 after at least 10 years of service, or who took VRS or retired under FR 56(j)
- Yes: The legally wedded spouse of such a retiree who died before choosing
- No: Employees under the old pension scheme
- No: Private sector and All Citizen NPS subscribers
- No: State government employees (unless their state has its own UPS)
- No: Anyone who did not choose by the deadline (they stay in NPS)
UPS last date to opt: deadline
The last date to move from NPS to UPS was first 30 June 2025. It was extended to 30 September 2025, and then to 30 November 2025. That date has passed. Employees in service and past retirees who did not choose UPS by then continue in NPS. New employees still choose within 30 days of joining.
- Employees in service used Form A2. New joiners use Form A1.
- Past retirees and spouses used claim forms B2, B4 or B6. Those retiring from 1 April 2025 claim with Form B1 (or B3 and B5 for a spouse).
- The form goes to your DDO (drawing and disbursing officer), or online through the CRA (Protean or KFintech).
UPS pension formula with examples
Assured payout = (P ÷ 2) × (Q ÷ 300)
- P is your average basic pay of the last 12 months before retirement. DA is not part of P.
- Q is your qualifying service in months. It counts up to 300 months (25 years). Below 120 months (10 years) there is no assured payout.
- The payout is at least ₹10,000 a month after 10 years of service on superannuation.
- Dearness relief is added at the DA rate, from the time the payout starts.
Less than 25 years: with ₹80,000 average basic and 15 years (180 months), the payout is ₹80,000 ÷ 2 × 180 ÷ 300 = ₹24,000 a month.
The minimum: with ₹30,000 basic and 10 years, the formula gives ₹6,000. That is below the minimum, so the payout is ₹10,000.
| Service | Share of basic | ₹60,000 basic | ₹1,20,000 basic |
|---|---|---|---|
| 10 years | 20% | ₹12,000 | ₹24,000 |
| 12 years | 24% | ₹14,400 | ₹28,800 |
| 15 years | 30% | ₹18,000 | ₹36,000 |
| 20 years | 40% | ₹24,000 | ₹48,000 |
| 25 years | 50% | ₹30,000 | ₹60,000 |
| 30 years | 50% | ₹30,000 | ₹60,000 |
For your own pay and service, use the UPS vs NPS calculator.
UPS contribution: how much you and the government pay
| Who pays | UPS | NPS (without UPS) |
|---|---|---|
| You | 10% of basic + DA, to your account | 10% of basic + DA |
| Government, to your account | 10% of basic + DA | 14% of basic + DA |
| Government, to a pool | About 8.5%, to fund the assured payout | None |
- Your NPS account (PRAN) and the money in it carry on under UPS. This is your individual corpus.
- You can choose the pension fund and the investment pattern: the default, 100% government bonds, LC-25 or LC-50. You can change the fund once a year and the pattern twice a year.
- You can take money out during service up to 3 times, up to 25% of your own contributions, after 3 years, for needs like a house, children's education or marriage, or illness.
UPS lump sum at retirement
On retirement you get a lump sum of one tenth of your last monthly basic pay + DA for every completed six months of service. It is paid on top of the monthly payout and does not reduce it.
For Meena: last basic + DA = ₹1,92,000. One tenth of it is ₹19,200. With 28 years, she has 56 six-month blocks, so her lump sum is ₹10,75,200.
UPS final withdrawal and the benchmark corpus
At retirement you can also take up to 60% of your corpus as cash. But the monthly payout then falls in the same proportion. If you take nothing, you get the full payout and your corpus moves to the government pool.
| You withdraw | Payout you keep | Meena's payout |
|---|---|---|
| Nothing | 100% | ₹60,000 |
| 20% of corpus | 80% | ₹48,000 |
| 40% of corpus | 60% | ₹36,000 |
| 60% of corpus | 40% | ₹24,000 |
The payout also assumes your corpus is at least the benchmark corpus. This is what your account would hold if every contribution had come in on time and been invested in the default pattern. If your corpus is lower (for example, after a choice of fund that did worse), the payout is cut in proportion. If it is higher, the extra is paid to you as cash.
UPS family pension and death of the employee
- Step 1After retirementThe spouse gets 60% of the payout for life, with dearness relief. For example, Meena's husband would get ₹36,000 plus DR.
- Step 2Spouse must be legally weddedOn the date of retirement. A spouse married after retirement does not get the family payout.
- Step 3Death in serviceThe family can choose UPS benefits or the old-style family pension under the CCS (Pension) Rules, 2021.
Retirement and death gratuity are also paid, under the CCS (Payment of Gratuity under NPS) Rules, 2021.
UPS for VRS, resignation and dismissal
| How you leave | What you get under UPS |
|---|---|
| Superannuation, 10 years or more | Lump sum, assured payout, family payout |
| Superannuation, under 10 years | No assured payout. Your corpus is paid to you |
| Voluntary retirement, 25 years or more | Lump sum now. The payout starts from the date you would have retired normally |
| Retirement under FR 56(j) (in public interest) | Payout from the date of retirement |
| Resignation | No assured payout. Your corpus is paid to you |
| Resigning to join another central government post | UPS continues with the same PRAN |
| Dismissal or removal | No assured payout. Your corpus is paid to you |
UPS switch back to NPS: rules
You can move from UPS back to NPS once during your service. It is one way: you cannot return to UPS after that.
- Switch at least 1 year before your retirement date, or 3 months before the date of voluntary retirement. If you do not, you stay in UPS.
- After the switch, the government pays 14% into your NPS account. The extra 4% for your months under UPS is worked out and added to your account.
- You then get NPS benefits only: no assured payout, no UPS lump sum.
- The switch is not allowed for removal, dismissal, compulsory retirement as a penalty, or while disciplinary proceedings are on.
UPS for employees who retired before 31 March 2025
NPS subscribers who retired on or before 31 March 2025 after at least 10 years of service, and chose UPS by the deadline, get these benefits:
- The UPS lump sum.
- A monthly top-up: the UPS payout with dearness relief, minus a set annuity amount worked out from their NPS corpus. It is paid from the date of retirement.
- Arrears for the past months, with simple interest at the PPF rate (7.1% today).
UPS tax benefits and tax on pension
- ₹1.5 LOwn contributionOld regime, Section 123 (earlier 80C, 80CCD(1))
- 10%Government contribution deductedSection 124 (earlier 80CCD(2))
- Tax-freeLump sum and up to 60% withdrawal
- TaxableMonthly payoutAs pension under Salaries
- Contributions: from 4 July 2025, UPS gets the same tax benefits as NPS. Your own 10% counts in the ₹1,50,000 limit in the old regime. The government's 10% to your account is deducted from your income. The 8.5% to the pool is not taxed as your salary.
- On retirement: the UPS lump sum and a final withdrawal of up to 60% are tax-free. The move of your corpus to the pool is not taxed. If your corpus is above the benchmark, 60% of the extra is tax-free and 40% is taxed as salary.
- Monthly payout: taxed as pension under Salaries, at your slab rate, with the standard deduction. The spouse's family payout is taxed as income from other sources.
How to choose UPS and claim the pension
- Step 1New joiner: Form A1Within 30 days of joining, to your DDO or online.
- Step 2Before retirementCheck your PRAN statement: individual corpus and benchmark corpus.
- Step 3Claim: Form B1With your DDO, for the lump sum, any withdrawal and the payout.
- Step 4Switch, if you wantAt least 1 year before retirement, to move back to NPS.
UPS: strengths and limits
- Yes: Known payout of up to 50% of basic pay
- Yes: Dearness relief, so the payout rises with DA
- Yes: ₹10,000 minimum after 10 years
- Yes: 60% family payout for the spouse
- Yes: Lump sum on top of the payout
- No: No assured payout below 10 years, on resignation or dismissal
- No: The corpus goes to the government pool, not to your family
- No: Any cash withdrawal cuts the payout
- No: Payout uses basic pay only, not DA
UPS vs NPS vs OPS: comparison table
| UPS | NPS | Old pension scheme (OPS) | |
|---|---|---|---|
| Who | Central staff under NPS who opted | Central staff joining from 2004 | Central staff who joined before 2004 |
| Your contribution | 10% of basic + DA | 10% of basic + DA | None |
| Government contribution | 10% + about 8.5% to a pool | 14% | Paid from the budget |
| Pension | 50% of average basic of last 12 months (25 years) | From an annuity on at least 40% of the corpus | 50% of last basic pay (10 years) |
| Minimum pension | ₹10,000 | None | ₹9,000 |
| Rises with DA | Yes, dearness relief | No | Yes, dearness relief |
| Family pension | 60% of payout | Depends on the annuity | 30% of last pay (more in some cases) |
| Cash at retirement | 1/10 of pay for each six months | Up to 60% of the corpus, tax-free | Commute up to 40% of pension |
| Market risk | With the government (if corpus meets benchmark) | With you | None |
UPS vs NPS: which pays more?
An example from the calculator's engine: age 45, retiring at 60 with 30 years of service, basic pay ₹1,00,000 today, basic rising 4% a year, DA 60% today rising 5 points a year, NPS return 9%, and 40% of the NPS corpus used for an annuity at 7%.
| At retirement | UPS | NPS |
|---|---|---|
| Corpus at retirement | ₹5,48,44,412 | ₹5,88,19,038 |
| Lump sum | ₹29,57,270 | ₹3,52,91,423 |
| Monthly pension in the first month | ₹2,46,439 | ₹1,37,244 |
| Monthly pension 10 years later | ₹3,53,587 | ₹1,37,244 |
| Spouse's pension (first month) | ₹1,47,864 | Depends on the annuity |
The result depends on a few things: your last basic pay (UPS), the NPS return and annuity rate (NPS), how fast DA rises (UPS), and how long you and your spouse live. A higher NPS return makes NPS look better; a longer life and faster DA rises make UPS look better. Try your own numbers on the UPS vs NPS calculator, or see the NPS rules on the National Pension System page.
Frequently asked questions
What is the Unified Pension Scheme?
The Unified Pension Scheme (UPS) is an option under NPS for central government employees, in force from 1 April 2025. It gives an assured monthly payout of 50% of average basic pay of the last 12 months after 25 years of service, a minimum of ₹10,000, 60% to the spouse after death, dearness relief and a lump sum at retirement.
How is UPS pension calculated?
Payout = (average basic pay of the last 12 months ÷ 2) × (months of service ÷ 300). With ₹1,20,000 average basic and 28 years of service, the payout is ₹60,000 a month, plus dearness relief of 60% (₹36,000) at today's DA.
Who can choose UPS?
Central government employees covered by NPS who were in service on 1 April 2025, new central government employees who joined on or after that date, and past NPS retirees (or their spouses) who retired on or before 31 March 2025 after at least 10 years of service. Choosing UPS is optional.
What was the last date to choose UPS?
30 November 2025 for employees in service and past retirees. It was first 30 June 2025, then extended twice. New joiners choose within 30 days of joining. Anyone who did not choose stays in NPS.
Can I switch back from UPS to NPS?
Yes, once. You must switch at least 1 year before your retirement date, or 3 months before voluntary retirement. After the switch you are in NPS for good, the government contribution becomes 14%, and the extra 4% for your UPS months is added to your account. You cannot switch if you face dismissal, removal, compulsory retirement as a penalty, or disciplinary proceedings.
What is the minimum pension under UPS?
₹10,000 a month, plus dearness relief, on superannuation after at least 10 years of service. For example, with ₹30,000 basic and 10 years, the formula gives ₹6,000, so the payout is raised to ₹10,000.
How much lump sum do I get under UPS?
One tenth of your last monthly basic pay + DA for every completed six months of service. With ₹1,20,000 basic, 60% DA and 28 years (56 six-month blocks), it is ₹10,75,200. It does not reduce the monthly payout.
Does UPS give family pension?
Yes. After the employee's death, the legally wedded spouse gets 60% of the payout for life, with dearness relief. A spouse married after retirement does not get it.
What happens if I resign or take VRS under UPS?
If you resign, or are dismissed or removed, there is no assured payout; your corpus is paid to you. With voluntary retirement after 25 years of service, the payout starts from the date you would have retired normally. The lump sum and any final withdrawal are paid when you leave.
Is UPS pension taxable?
Yes. The monthly payout is taxed as pension under Salaries, and the spouse's family payout as income from other sources. The UPS lump sum and a final withdrawal of up to 60% of the corpus are tax-free. Contributions get the same deductions as NPS.
Is UPS better than NPS?
It depends on your service, pay, the NPS return and how long you and your spouse live. UPS gives a known payout that rises with DA. NPS gives a bigger corpus and lump sum, but the pension depends on the market and the annuity rate and does not rise. The UPS vs NPS calculator shows both for your numbers.
Do retired employees get UPS arrears?
Yes, if they retired on or before 31 March 2025 under NPS after at least 10 years of service and chose UPS by the deadline. They get the UPS lump sum and a monthly top-up (the UPS payout with dearness relief minus a set NPS annuity amount) from the date of retirement, with arrears and simple interest at the PPF rate.