Only 1.37% of eligible central employees opted for UPS as of July 20

Just 31,555 employees have enrolled in the Unified Pension Scheme despite a three-month extension; Finance Ministry highlights low adoption

Only 1.37 per cent of eligible central government employees have opted for the Unified Pension Scheme (UPS) so far. In a written reply to the Lok Sabha on Monday, the Finance Ministry informed that as of 20 July 2025, a total of 31,555 employees had opted for the scheme.

 

The government has extended the deadline for opting into the scheme to September 2025 from the earlier cut-off date of 30 June 2025.

 

Minister of State for Finance Pankaj Chaudhary said the UPS has been introduced as an option under the National Pension System (NPS) for central government employees currently covered under NPS, with the objective of providing assured payouts. 

 

In August 2024, Information and Broadcasting Minister Ashwini Vaishnaw had said, “UPS is being implemented by the Central Government, benefiting ₹23 lakh Central Government employees.” 

In a separate reply in the Lok Sabha on Monday, the Finance Ministry informed that, as per the eligibility criteria, there are 25,756 retired central government subscribers eligible to receive additional benefits under UPS. 

 

“These eligible subscribers are those central government employees who have either superannuated, deceased, or retired under Fundamental Rule 56(j) on or before 31 March 2025, after completing ten years or more of qualifying service under NPS,” said Finance Minister Nirmala Sitharaman.

 

Sitharaman further stated that as on 20 July 2025, 7,253 claims had been received, out of which 4,978 had been processed for payment of benefits under UPS.

 

The UPS guarantees employees 50 per cent of their average basic pay over the last 12 months before retirement as pension, provided they have completed a minimum qualifying service of 25 years. This is in contrast to the market-linked returns under the NPS.

 

According to the scheme approved by the Union Cabinet, the pension will be proportionate for a lesser service period of up to a minimum of 10 years.

 

The scheme has been introduced to address concerns raised by government employees over the NPS, which has been in effect since 1 January 2004. The government has also extended to UPS the same tax benefits available under the Income-tax Act, 1961, for NPS.

 

Under the earlier Old Pension Scheme (OPS), employees were not required to contribute towards their pension. However, they contributed to the General Provident Fund (GPF), the accumulated amount of which—along with interest—was paid to the employee at the time of retirement.