Unified Pension for Central Government Employees - Overview, Key features, Lumpsum and Pension Calculation

Unified Pension Scheme (UPS) for Central Government Employees

Ministry of Finance Notification: F. No. FX-1/3/2024-PR dated 24th January 2025

Effective Date: 1st April 2025

Introduction

The Central Government has introduced the Unified Pension Scheme (UPS) as an optional pension scheme for employees covered under the National Pension System (NPS). This scheme provides assured monthly payouts along with other benefits to eligible employees.

Key Features of UPS

Eligibility

• Applicable to Central Government employees covered under NPS
• Employees must opt for UPS under NPS
• Not applicable in cases of removal/dismissal or resignation

Assured Payout Scenarios

• Superannuation: After 10+ years of qualifying service
• Retirement under FR 56(j): From date of retirement
• Voluntary Retirement: After 25+ years of service

Pension Benefits

• Full Assured Payout: 50% of 12-month average basic pay (minimum 25 years service)
• Minimum Guarantee: ₹10,000/month for 10+ years service
• Family Pension: 60% of payout to spouse after death
• Dearness Relief: Adjusted like DA for serving employees

Contribution Structure

Contributor	Rate	Corpus
Employee	10% of (Basic Pay + DA)	Individual Corpus
Government (Matching)	10% of (Basic Pay + DA)	Individual Corpus
Government (Additional)	~8.5% of (Basic Pay + DA)	Pool Corpus

Lump Sum Payment Calculation

On superannuation/retirement, employees receive a lump sum amount calculated as:

Lump Sum = (1/10 of Emoluments) × Number of completed 6-month periods

Where emoluments = Basic Pay + DA at retirement

Qualifying Service	Completed 6-month periods	Lump Sum Amount*
10 years (120 months)	20	₹1,37,700
15 years (180 months)	30	₹2,06,550
20 years (240 months)	40	₹2,75,400
25 years (300 months)	50	₹3,44,250

*Example based on Basic Pay ₹45,000 + DA @53% (₹23,850) = ₹68,850 emoluments

Important Notes

• Option for UPS is irrevocable once exercised
• Existing NPS corpus will be transferred to UPS individual corpus
• No lump sum payment if service is less than 10 years
• PFRDA will issue detailed regulations for implementation

Illustrative Examples

Scenario 1: Full Qualifying Service (25+ years)

• 12-month avg basic pay: ₹45,000
• Individual Corpus: ₹50,00,000
• Benchmark Corpus: ₹50,00,000
• Monthly Pension: ₹22,500 + DR

Scenario 2: 10 Years Service

• 12-month avg basic pay: ₹45,000
• Individual Corpus: ₹25,00,000
• Benchmark Corpus: ₹25,00,000
• Monthly Pension: ₹10,000 (minimum) + DR

Note: The key points of the Unified Pension Scheme as per Gazette Notification No. F. No. FX-1/3/2024-PR dated 24th January 2025. For complete details, please refer to the official notification.