Unified Pension Scheme (UPS) Explained: Key Details and Gratuity Provisions

Unified Pension Scheme (UPS) Explained: Key Details and Gratuity Provisions.  Rajya Sabha Question and Answer outlines the key provisions of the Unified Pension Scheme (UPS) introduced by the Government of India as an option under the National Pension System (NPS) for Central Government employees. It addresses the commencement of assured payouts upon voluntary retirement after 25 years of service, starting from the employee’s superannuation date. Additionally, it clarifies the applicability of gratuity under UPS in accordance with the Central Civil Services rules. The Minister of State for Finance, Shri Pankaj Chaudhary, provides insights into the rationale behind these provisions and their implications for employees.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
RAJYA SABHA

UNSTARRED QUESTION NO. 1382
ANSWERED ON TUESDAY, 11 MARCH, 2025/ 20 PHALGUNA, 1946 (SAKA)

UNIFIED PENSION SCHEME

1382. Shri Javed Ali Khan
Will the Minister of Finance be pleased to state:

(a) whether, as per the Gazette Notification of the Ministry dated 24th January, 2025, under Unified Pension Scheme (UPS), in cases of voluntary retirement after a minimum 25 years of qualifying service, assured payout will be commenced from the date on which the employee would have superannuated, if he had continued in service;

(b) if so, the details thereof and rationale therefor;

(c) whether Gratuity as in the case of Old Pension Scheme and New Pension Scheme is admissible under UPS;

(d) if so, the details thereof; and

(e) if not, the reasons therefor?

ANSWER

MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)

(a) to (e) Unified Pension Scheme (UPS) has been introduced, vide notification No. FX-1/3/2024-PR dated 24.01.2025, as an option under National Pension System (NPS) for the employees of Central Government who are covered under the NPS. UPS, being a fund-based Pension System, relies on the regular and timely accumulation and investment of applicable contribution (from both the employee and employer) for assured payouts to the employees.

Accordingly, keeping in view the growth of the fund over the actual length of the service, date for commencement of assured payouts in case of Voluntary Retirement will be from the date such employee would have superannuated, if the service period had continued to superannuation.

UPS being an option under NPS, gratuity is payable in terms of Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, notified by the Department of Pensions and Pensioners’ Welfare.

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