PFRDA extends one-time window for central govt employees to opt into Unified Pension Scheme

The Pension Fund Regulatory and Development Authority (PFRDA) has extended a one-time option for central government employees to opt for the Unified Pension Scheme (UPS).

Following recent clarifications and developments in the UPS, the central government has decided to offer a one-time option to central government employees who joined service between April 1, 2025, and August 31, 2025, and who have opted for the National Pension System (NPS), to switch to the UPS, according to the PIB press release issued on September 16, 2025.

The Ministry of Finance notified the UPS for eligible Central Government employees.

The PIB press release stated that employees can exercise this option on or before 30 September 2025, in line with the cut-off date already set for other eligible categories under UPS. The deadline for eligible employees and former retirees under NPS to opt for UPS is also 30 September 2025.

UPS offers a pension equivalent to 50% of an employee's average basic salary over the last 12 months before retirement. To be eligible, employees must have at least 25 years of service, with benefits proportional to those with 10-25 years of service. If a pensioner dies, the scheme provides a family pension of 60% of the original pension.

Furthermore, it guarantees a minimum pension of ₹10,000 per month for retirees with at least 10 years of service. Pension amounts are indexed for inflation through Dearness Allowance, and retirees receive a lump sum payment upon retirement, calculated as one-tenth of their monthly emoluments for every completed six months of service.

One must also understand that once you choose UPS, it cannot be undone. If no choice is made, the employee remains on NPS. Eligible for UPS benefits, including arrears and interest (at PPF rates).

This initiative aims to enable Central Government employees to make informed decisions about planning their post-retirement financial security. However, employees should carefully evaluate their retirement goals, risk tolerance, and financial needs before selecting between the two schemes.