'No proposal to change or replace Unified Pension Scheme,' says Finance Minister Sitharaman in Lok Sabha

Finance Minister Nirmala Sitharaman on Monday said the government has no plans to modify or replace the Unified Pension Scheme (UPS), which offers Central government employees covered under the National Pension System (NPS) an assured monthly payout after retirement.

In a written reply in the Lok Sabha, Sitharaman said 1,18,195 employees, including new recruits, serving staff and past retirees, had opted for UPS as on July 19, 2026.

UPS has been available as an option under NPS for Central government employees since April 1, 2025. It is aimed at offering assured, inflation-indexed retirement benefits, addressing longstanding demands for pension predictability and protection against longevity risk.


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"UPS has been introduced as an option under NPS for the employees of the Central government who are covered under the NPS. As on date, there is no proposal under consideration to make any changes or replace the UPS," she said.

The scheme also extends to employees who retired on or before March 31, 2025 under NPS after completing at least 10 years of regular service, as well as to the legally wedded spouses of eligible employees who have since died.

Sitharaman said UPS was designed to meet employees' demand for an assured pension while keeping the scheme fiscally sustainable and contributory in nature.

Since UPS has been in effect for a little over a year, the government has not yet reviewed its implementation or performance, she said.

She added that the cut-off date to opt for UPS was extended to November 30, 2025 following representations from employees and employee associations. The government has also extended retirement and death gratuity benefits under the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021, to employees covered by UPS.

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Employees who opted for UPS under NPS will also be eligible to claim benefits under the CCS (Pension) Rules, 2021, or the CCS (Extraordinary Pension) Rules, 2023, in case of death during service or discharge on grounds of invalidation or disablement, she said.

The government has extended the same tax benefits available under NPS to UPS as well, and has allowed employees who opted for UPS a one-time, one-way option to switch back to NPS, she added.