Finance Ministry Sets September 30 Deadline for Pension Plan Selection between the NPS and the newly introduced UPS
Finance Ministry Sets September 30 Deadline for Pension Plan Selection between the NPS and the newly introduced UPS
Employees must choose between NPS and UPS to secure post-retirement benefits
The Finance Ministry has issued a crucial directive requiring central government employees to finalize their pension plan option by September 30, 2025. Employees must choose between the National Pension System (NPS) and the newly introduced Unified Pension Scheme (UPS), which guarantees fixed pension benefits.
The UPS, launched on April 1, 2025, provides government staff the option of assured pensions in place of market-linked returns under NPS. While the deadline has already been extended twice, the ministry emphasized that no further extensions will be granted. Employees who fail to make a choice will remain under NPS by default, and those who stay in NPS cannot opt for UPS after September 30.
As of July 20, 2025, around 31,555 employees had opted for the UPS. In addition, the ministry on August 25 allowed UPS subscribers a one-time switch back to NPS. This facility can be exercised only once, at least one year before superannuation or three months before voluntary retirement, whichever is earlier. Employees switching back to NPS will not be able to return to UPS.
The Finance Ministry clarified that contributions under UPS will mirror the current structure of employee and government deposits, ensuring transparency. Furthermore, in case of administrative delays in registering employees or crediting contributions, compensation will be provided so that employees do not suffer financial loss.
The ministry has also extended the benefit of retirement gratuity and death gratuity under UPS. Officials have urged employees to act well in advance of the September 30 deadline to avoid last-minute hurdles and ensure smooth processing of requests.
This initiative, the ministry stated, is aimed at empowering government employees with an informed choice for their post-retirement financial security.
