Important changes to India̵s pension architecture have surfaced by April 2025, particularly regarding the Old Pension Scheme (OPS) and the advent of the Unified Pension Scheme (UPS). This change aims to improve retirement security for government employees
Updates on the Old Pension Scheme (OPS)
The Department of Pension and Pensioners’ Welfare has put out a circular enabling certain central government employees to opt for OPS on certain conditions, these specified conditions permitting, among others, coverage under Rule 10 of the Central Civil Service (Implementation of National Pension System) Rules, 2021. These apply to central government employees covered under the NPS who may be entitled to OPS benefits in the event of death while in service or discharge on invalidation or disablement.
This has addressed long-standing issues raised by employee unions, which had been advocating for the restoration of OPS based on the financial insecurity associated with NPS.
Introduction of the Unified Pension Scheme (UPS)
Given the concerns raised, the government has launched the Unified Pension Scheme (UPS), effective from April 1, 2025. UPS comes with a guaranteed minimum pension of ₹10,000 per month, provided that employees contribute 10% of their basic pay and Dearness Allowance every month.
Eligibility and Enrollment
UPS can be availed by
- Current central government employees enlisted under NPS as of April 1, 2025.
- New recruits joining the central government service on or after April 1, 2025.
Eligible employees should enroll by June 30, 2025. Enrollment can be done using Protean CRA Portal or by physical submission.
Principal Features of UPS
- Assured pension amount-of-50 percent of average basic salary in the last 12 months preceding retirement in case of not less than 25 years of service.
- Minimum guaranteed pension of ₹10,000 monthly for employees with more than 10 years of service.
- Indexation of inflation to maintain the purchasing power of pensions.
- Provision for family pension plus lump-sum payment at the time of superannuation.
These reforms herald the commitment of the government to provide its employees with secure and predictable retirement while balancing the interests of fiscal prudence and employee welfare.
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