Government Allows One-Time Switch from UPS to NPS

The Union Finance Ministry has allowed central government employees to make a one-time, one-way switch from the Unified Pension Scheme (UPS) to the National Pension System (NPS). This option is available up to one year before retirement or three months before voluntary retirement.

Eligibility Rules

Employees facing dismissal, removal, or disciplinary action cannot use this facility. Once an employee switches, they will lose all UPS benefits, including assured payouts.

Contribution to NPS

At the time of exit, the government’s 4% extra contribution will be added to the employee’s NPS corpus, making it part of their retirement savings.

UPS Background

The Unified Pension Scheme (UPS) was introduced on April 1, 2025, as an option under NPS for central government employees. UPS provides assured payouts to employees.

So far, about 31,555 employees have opted for UPS as of July 20, 2025. The last date to enrol in the scheme is September 30, 2025.

Read More: NPS vs Mutual Fund: Meaning and Key Differences. 

Conclusion

This move gives government employees flexibility in retirement planning while strengthening NPS as the main long-term pension option. However, employees must weigh the loss of assured UPS benefits before making the switch.

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