UPS Unified Pension Scheme – Frequently Asked Questions (FAQs) Ultimate

UPS Unified Pension Scheme – Frequently Asked Questions (FAQs)

The UPS Unified Pension Scheme is a new option introduced by the Central Government for its employees, starting from April 1, 2025. It provides assured payouts based on certain conditions. Here’s a simplified breakdown of the key FAQs related to UPS:

1. What is the UPS Unified Pension Scheme?

The Unified Pension Scheme (UPS) is a new pension scheme introduced by the Central Government under the National Pension System (NPS) for Central Government employees, effective from 1st April 2025. It offers an assured pay-out based on prescribed conditions.

2. Are existing Central Government employees eligible to opt for UPS?

Yes, existing Central Government employees in service as of 1st April 2025 and who are covered under the National Pension System (NPS) are eligible to opt for UPS.

3. Are newly recruited Central Government employees eligible to opt for Unified Pension Scheme (UPS)?

Yes, newly recruited Central Government employees joining on or after 1st April 2025 are eligible to opt for UPS.

4. Can a Central Government employee retired before 31st March 2025 opt for Unified Pension Scheme (UPS)?

Yes, employees retired before 31st March 2025 who meet the prescribed conditions are eligible to opt for UPS. These conditions are:

• Minimum 10 years of qualifying service at the time of superannuation,
• Retired under Fundamental Rules 56(j) (not considered a penalty), or
• The legally wedded spouse of a deceased subscriber eligible under UPS.

5. What forms should be filled by eligible employees to opt for UPS?

• Form A1: For newly recruited employees joining on or after 1st April 2025.
• Form A2: For existing employees currently subscribed to NPS, opting to switch to UPS.

6. Where can the forms for UPS enrollment be obtained?

The forms (A1 and A2) along with instructions and required documents can be downloaded from the website of Protean CRA at www.npscra.nsdl.co.in/ups.php.

7. What are the timelines to exercise the UPS option for existing employees?

Eligible employees must exercise their option within 3 months from 1st April 2025 or within any extended timelines allowed by the Central Government.

8. What are the timelines for retired employees (on or before 31st March 2025) to exercise the UPS option?

The option must be exercised within 3 months from 1st April 2025 or within any extended timelines allowed by the Central Government.

9. What are the timelines for the legally wedded spouse of a deceased subscriber to exercise the UPS option?

The spouse must exercise the option within 3 months from 1st April 2025 or within any extended timelines allowed by the Central Government.

10. What are the timelines for new recruits to the Central Government services joining on or after 1st April 2025 to exercise the UPS option?

New recruits must exercise the option within 30 days from the date of joining or within any extended timelines allowed by the Central Government.

11. Can the UPS option be changed once exercised?

No, once the option to choose UPS is exercised, it is final and irrevocable.

12. What happens if an employee fails to opt for UPS within the specified period?

If an eligible person does not exercise the UPS option within the specified timeline, they will be deemed to have opted to continue under NPS without the UPS option.

13. What is the Permanent Retirement Account Number (PRAN) under UPS?

PRAN is a Permanent Retirement Account Number assigned to a subscriber opting for UPS. All transactions are recorded under this number by the CRA system.

14. Where should the UPS option form/account opening forms be submitted?

Forms can be submitted either online or physically to the Head of Office/DDO where the subscriber is employed.

15. Is there an online process for enrollment under UPS?

Yes, subscribers can submit their request for enrollment online by filing the required forms through the CRA website.

16. What is qualifying service under UPS?

Qualifying service refers to the completed months for which a subscriber has rendered regular services under the Central Government, as determined by the Head of Office, according to the relevant regulations.

17. How can a subscriber obtain the status of their application?

Subscribers can obtain the status of their application from CRA and their respective Nodal Office.

18. Can UPS subscribers still maintain voluntary NPS Tier-I/II accounts?

Yes, UPS subscribers can voluntarily maintain NPS Tier-I and Tier-II accounts under the “All Citizen Model” along with UPS as a separate account within the same PRAN number.

19. What will happen to my existing corpus on migrating from NPS to UPS?

On migrating from NPS to UPS, the subscriber’s corpus will be transferred to the PRAN associated with UPS.

20. Will a new PRAN be issued on migration from NPS to UPS?

No, the subscriber will continue to be identified by the same PRAN linked to UPS.

21. What are Individual Corpus and Benchmark Corpus?

• Individual Corpus: The value of the corpus available in a subscriber’s PRAN under UPS.
• Benchmark Corpus: A notional value used for comparison with the individual corpus, based on the NAV of the default investment.

22. Can an employee select their pension fund and investment pattern under UPS?

Yes, employees can choose from registered pension funds and various investment patterns, including default patterns defined by PFRDA.

23. What happens if an employee does not choose a pension fund?

If no pension fund is selected, the employee will be assigned the default pension fund and investment pattern defined by PFRDA.

24. What are the available investment choices under UPS, other than the default pattern?

Employees can choose:

• Government Securities Scheme (Scheme G)
• Life Cycle based schemes:
  • Conservative Life Cycle Fund (LC-25): Max. 25% equity exposure.
  • Moderate Life Cycle Fund (LC-50): Max. 50% equity exposure.

25. How many times can the choice of pension fund and investment choice be changed in a financial year?

• Pension fund choice: Once per financial year.
• Investment choice: Twice per financial year.

26. Will subscribers be informed about corpus value updates?

Yes, CRA will periodically provide details of both individual and benchmark corpus in the PRAN account statement.

27. How is the assured payout calculated under UPS?

The assured payout is calculated at 50% of the 12-month average basic pay immediately prior to superannuation, provided the employee has completed a minimum of 25 years of qualifying service. For shorter qualifying service periods, a proportionate payout will be provided.

28. When does the payout commence in the case of voluntary retirement?

If an employee opts for voluntary retirement after 25 years of qualifying service, the assured payout will commence from the date the employee would have superannuated had they continued working.

29. What is the minimum guaranteed payout under UPS?

The minimum guaranteed payout is Rs. 10,000 per month after completing 10 years of service.

30. Will the assured payout under UPS reduce if the qualifying service is less than 25 years?

Yes, if the qualifying service is between 10 and 25 years, the assured payout will be proportionately reduced.

31. What is Admissible Payout?

The admissible payout is a proportionately reduced assured payout, calculated using the following formula:
Admissible Payout = Assured Payout x (Individual Corpus / Benchmark Corpus) x (1 – Final Withdrawal %)

32. What is Family Payout under UPS?

Upon the death of a subscriber, the legally wedded spouse will receive 60% of the subscriber’s admissible payout or top-up amount for life.

33. What benefits are available for superannuated or retired employees covered under NPS before 31st March 2025?

Eligible retired employees will receive:

• Lump sum payment,
• Monthly top-up amounts,
• Applicable dearness relief,
• Simple interest as per PPF rates on arrears.
  These benefits are in addition to NPS benefits, including annuities.

34. How is the monthly top-up amount calculated for employees retired before 31st March 2025 and receiving annuity under NPS?

The monthly top-up amount is calculated as:
Top-up = (Admissible Payout + Dearness Relief) – Representative Annuity Amount.

35. What is the Representative Annuity rate and amount?

The Representative Annuity rate for the period from January 2014 to March 2025 is specified in Schedule VI of the PFRDA Regulations. The Representative Annuity Amount is calculated based on the formula:
Annuity Amount = (Individual Corpus) x (1 – Final Withdrawal %) x (Representative Annuity Rate) / (12 * 100)

36. Who is eligible to receive assured payouts under UPS?

Assured payouts are available for employees who:

• Superannuate after 10 years of qualifying service,
• Are retired under FR 56(j), or
• Voluntarily retire after a minimum of 25 years of service.

37. Who can claim the family payout under UPS?

Only the legally wedded spouse of the deceased subscriber, as recorded in service records, is eligible for family payout.

38. Is the spouse of the subscriber married after superannuation eligible for family payout?

No, only the legally wedded spouse at the time of superannuation is eligible.

39. Is there any provision for lump-sum payment under UPS?

Yes, a lump-sum payment equivalent to one-tenth of the last drawn basic pay (plus NPA and DA) is payable for every 6-month period of qualifying service.

40. Can a subscriber withdraw an amount at retirement, and to what extent?

Yes, the subscriber can withdraw up to 60% of the individual corpus or benchmark corpus (whichever is lower) available in the PRAN tagged to UPS at the time of superannuation or retirement.

41. How is the final withdrawal percentage calculated?

Subscribers can withdraw up to 60% of the individual corpus or benchmark corpus, whichever is lower, at the time of superannuation, voluntary retirement, or retirement under FR 56(j).

42. When will final withdrawal be admissible?

Final withdrawal will be admissible on the date of superannuation, voluntary retirement, or retirement under FR 56(j).

43. How is Dearness Relief applied under UPS?

Dearness Relief, as declared by the Central Government, will be applicable on both admissible and family payouts and will be paid once the admissible payout commences.

44. Are UPS benefits available if the employee has been removed, dismissed, or resigned?

No, assured payouts are not available in cases of removal, dismissal, or resignation.

45. Can a subscriber make partial withdrawals during the service period?

Yes, partial withdrawals up to 25% of self-contributions (excluding returns) are allowed after a 3-year lock-in period, for specified purposes.

46. What purposes are allowed for partial withdrawal under UPS?

• Higher education or marriage of children,
• Purchase/construction of a house,
• Medical emergencies,
• Disability-related expenses,
• Skill development.

47. How many times can partial withdrawals be made under UPS?

A maximum of three times, including withdrawals made under NPS before opting for UPS.

48. Can the partial withdrawal amount be replenished?

Yes, subscribers can replenish any withdrawn amount before retirement.

49. How are UPS benefits claimed after retirement or death?

The subscriber or their legally wedded spouse must submit the relevant forms to the Head of Office or DDO. These forms can be downloaded from the Protean CRA website.

50. What is a UPS Payout Order (UPO)?

The UPS Payout Order contains the details of benefits payable to the subscriber.

51. Who authorizes the UPS Payout Order?

The UPO is authorized by the respective PAO and sent to the National Pension System Trust through CRA.

52. How will UPS Unified Pension Scheme benefits be paid?

Once the UPO is authorized by the National Pension System Trust, monthly payouts will be made to the subscriber’s bank account, along with dearness relief as applicable.

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