Is the UPS deadline extended? See if you can still switch from NPS to UPS

The deadline for Central Government employees to switch from the NPS to the assured-payout UPS has closed, leaving those who failed to opt-in automatically enrolled in the market-linked NPS by default

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November 30 was the deadline for central government employees to shift from the National Pension System (NPS) to the Unified Pension Scheme (UPS), prompting some to ask if an extension is under consideration and if a change is still possible.

 

There is no notification or circular from the government that the deadline will be reopened.

 

Is switching still allowed?

In short, no. The option to move from NPS to UPS was time-bound. Employees who did not submit their choice before the deadline are automatically treated as continuing under the NPS framework. There is no mechanism for a belated application or correction post-deadline.

 

Understanding the Unified Pension Scheme

The UPS, which became operational on April 1, was introduced as an alternative retirement arrangement for Central Government employees who entered service under the NPS regime. Unlike the market-linked NPS, UPS aims to provide predictable retirement income through an assured payout structure.

 

Key features include:

Employee contribution: 10 per cent of basic pay plus dearness allowance every month

 

Government contribution: Matching 10 per cent to the employee’s UPS account

 

Additional pool allocation: An estimated 8.5 per cent paid by the Central Government towards a pooled corpus used to support assured payouts

 

How the assured pension is calculated

 

The full assured pension under UPS is set at 50 per cent of the average basic pay earned in the 12 months prior to retirement, subject to a minimum of 25 years of qualifying service.

 

In other cases:

 

If qualifying service is less than 25 years, the pension is proportionately reduced.

 

A minimum guarantee of Rs 10,000 per month is available where an employee retires after at least 10 years of service and contributions have been fully credited without interruption.

 

For voluntary retirement after 25 years of service, the pension begins from the date the employee would have ordinarily retired.

 

The assured payout formula is:

 

Assured pension = (½ of basic pay) × (qualifying service in years / 300)

 

Tax treatment of UPS contributions

 

Employee contributions to UPS continue to be treated similarly to NPS for tax purposes. Deductions are available under Section 80CCD(1) for contributions up to 10 per cent of monthly pay (basic plus dearness allowance), as UPS functions as an option within the NPS framework for tax treatment.

 

Unless the government issues a fresh order, the migration window is closed, and employees who did not opt for UPS in time will remain within the NPS structure by default.