Government allows one-time pension scheme switch: UPS members can move to NPS; deadline fixed for September 30

The Finance Ministry has launched a single-use, unidirectional switch option for central government employees who opted for the Unified Pension Scheme (UPS) to return to the National Pension System (NPS). The move gives staff and eligible retirees more clarity on their pension choices as the September 30, 2025 deadline approaches.

Strict rules for switching

According to the ministry, the switch from UPS to NPS can be exercised only once, and employees will not be allowed to revert to UPS thereafter. The option is permitted either a year before superannuation or three months before voluntary retirement.

The facility is not available to those facing removal, dismissal, compulsory retirement as punishment, or ongoing disciplinary proceedings. Employees who do not make use of this provision within the specified period will automatically remain under UPS.

The ministry has also clarified that those who choose to continue under NPS by September 30, 2025, cannot opt for UPS later. Conversely, existing UPS members now have a single, permanent opportunity to move back to NPS, subject to these conditions.

Features of the Unified Pension Scheme

The Unified Pension Scheme, which came into effect on April 1, 2025, serves as an alternative to NPS for central government staff, offering assured retirement benefits. It guarantees a minimum monthly payout of Rs 10,000 for employees who complete at least 10 years of qualifying service, provided contributions are regular and no withdrawals are made.

In the event of a pensioner’s death post-superannuation, 60 per cent of the last payout will go to the legally wedded spouse, as recognised at the time of retirement. However, the assured payout will not be available in cases of resignation, dismissal, termination, or superannuation before completing 10 years of service.