Centre extends one-time switch for govt staff to move back to UPS from NPS

Government gives NPS subscribers who joined after April 2025 till Sept 30 to switch to UPS, offering a chance to choose between assured pension and market-linked returns

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The Pension Fund Regulatory and Development Authority (PFRDA) has extended the one-time window allowing certain central government employees to switch between the National Pension System (NPS) and the Unified Pension Scheme (UPS).

 

Who can exercise this option?

 

According to the latest government notification, the facility is open to employees who:

 

·  Joined central government service between April 1, 2025 and August 31, 2025

 

·  Initially opted for NPS but now wish to migrate to UPS

 

·  Are not facing dismissal, compulsory retirement, or pending disciplinary proceedings

 

The option must be exercised on or before September 30, 2025, aligning with the cut-off date already announced for other eligible employees and retirees.

 

What does this mean for employees?

 

By moving to UPS, eligible staff will be entitled to:

 

·  Assured monthly pension: 50 per cent of average basic pay of the last 12 months (after 25 years of service)

 

·  Minimum pension: Rs 10,000 per month with 10 years of service

 

·  Family pension: 60 per cent of last payout to spouse

 

·  Dearness relief: Linked to inflation, similar to DA for serving employees

 

·  Lumpsum benefit: 10 per cent of emoluments for every completed six months of service

 

Importantly, employees who move to UPS retain the option to switch back to NPS later – but the move will then be final and irreversible.

 

Why this matters?

 

The move is aimed at giving employees flexibility to choose a retirement scheme that suits their financial goals.

 

·  UPS offers certainty through guaranteed pension payouts and inflation protection.

 

·  NPS offers market-linked growth, potentially higher returns over the long term, along with tax deductions under Section 80C, 80CCD(1), and an additional Rs 50,000 under Section 80CCD(1B).

 

Employees must weigh the trade-off between assured income in retirement (UPS) and potentially higher, but market-dependent, returns (NPS) before making a decision.