Big shift in retirement policy: Govt announces Old Pension Scheme-like benefits for UPS employees. Check new changes here

Central government employees enrolled under the Unified Pension Scheme (UPS) will now be entitled to retirement and death gratuity benefits, aligning them with those available under the Old Pension Scheme (OPS), Union minister of state for personnel Jitendra Singh said on Wednesday, according to a TOI report.

The move addresses a long-standing demand from staff covered under the National Pension System (NPS) and is expected to encourage more employees to shift to the UPS, which offers a defined pension payout.

Gratuity benefits under new rules

The Department of Pensions and Pensioners’ Welfare has issued an order clarifying that employees under the UPS will be eligible for benefits under the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021. This brings parity in retirement and death gratuity for UPS-covered employees with those under OPS.

Switching from NPS to UPS

Employees currently under NPS can opt for UPS, which guarantees a fixed monthly pension. The scheme provides 50% of the average basic salary drawn over the last 12 months before retirement, applicable to those with at least 25 years of service.

Minimum pension and family benefits

As per the scheme, employees with a minimum of 10 years of service will receive a monthly pension of at least ₹10,000 after retirement. In case of the pensioner's death, the family will be paid 60% of the last pension amount drawn.