FM Sitharaman says no plans to replace UPS as over 1.18 lakh central govt employees opt for scheme

More than 1.18 lakh central government employees, including new recruits, existing employees and past retirees, have opted for the Unified Pension Scheme (UPS), Finance Minister Nirmala Sitharaman informed the Lok Sabha on Monday, while clarifying that the government has no proposal to alter or replace the scheme.

In a written reply to a question, Sitharaman said a total of 1,18,195 employees had opted for the UPS as of July 19, 2026. The scheme was notified on January 24, 2025, and became operational from April 1, 2025, as an option under the National Pension System (NPS).

The UPS was introduced to provide an assured monthly payout after retirement to central government employees covered under the NPS. It was also made available to eligible past retirees who superannuated or retired on or before March 31, 2025, after completing at least 10 years of regular service, as well as to the legally wedded spouses of eligible deceased retirees. 

The government said the scheme was designed to address employees' long-standing demand for an assured pension while maintaining a fiscally responsible, funded and contributory pension system.

The Finance Minister said the government has not yet reviewed the implementation or performance of the UPS since it has been in operation only since April 2025.

Responding to questions on stakeholder feedback, Sitharaman said the government had made several changes based on representations from employees and associations. These included extending the deadline to opt for the UPS until November 30, 2025, allowing UPS subscribers to receive retirement and death gratuity benefits under the relevant Central Civil Services rules, extending tax benefits available under the NPS to UPS subscribers, and permitting a one-time, one-way switch back to the NPS.

The government also clarified that employees opting for the UPS would continue to be eligible for benefits under the CCS (Pension) Rules, 2021, or the CCS (Extraordinary Pension) Rules, 2023, in cases of death during service, invalidation or disablement.

On whether the Centre was considering replacing the UPS with another pension framework, Sitharaman said there is no proposal under consideration to make any changes to or replace the Unified Pension Scheme, which continues to remain an optional pension framework under the NPS for eligible central government employees.