Unified Pension Scheme (UPS) Now Implemented: How to Shift from NPS?

Starting April 1, government employees covered under the National Pension System (NPS) can migrate to the new Unified Pension Scheme (UPS). This scheme aims to provide greater social security, a guaranteed pension, and better investment flexibility. The introduction of UPS is a response to long-standing demands for restoring the Old Pension Scheme (OPS), offering similar benefits with new modifications.

Under the UPS, pensioners will receive a guaranteed pension based on their service years, and both employees and the government will contribute to the fund. If you are a central government employee and want to shift from NPS to UPS, here is everything you need to know.

Key Features of the Unified Pension Scheme (UPS)

• Guaranteed Pension: The scheme ensures a fixed pension amount based on service years.
• Government Contribution: Both the employee and the government will contribute 10% of the basic salary + DA (total 20%).
• Flexible Investment Options: Employees can invest in government’s default pension schemes or opt for private pension fund managers.
• Survivor Benefits: In case of the pensioner’s demise, the spouse will receive 60% of the pension amount.
• Fixed Minimum Pension: Employees with at least 10 years of service will receive a guaranteed pension of Rs.10,000 per month.
• Proportionate Pension Calculation: Employees serving between 10-25 years will receive a proportionate pension, while those with 25+ years of service will receive 50% of their last 12 months’ average basic salary.

How to Switch from NPS to UPS?

The migration process from NPS to UPS has been kept simple by the Department of Financial Services (DFS). Employees can opt for either an online or offline method.

Online Process to Migrate from NPS to UPS

1. Visit the official UPS migration portal: https://npscra.nsdl.co.in/ups.php
2. You will see two options: Register for UPS and Migrate from NPS to UPS.
3. Select the second option to shift from NPS to UPS.
4. Enter your Permanent Retirement Account Number (PRAN) and other required details.
5. Complete the verification process.
6. Your migration request will be processed, and confirmation will be provided once the transfer is completed.

Offline Process for NPS to UPS Migration

1. Download the NPS to UPS Migration Form from the official website or collect it from your department.
2. Fill in all required details, including PRAN, personal details, and employment information.
3. Submit the completed form to your department’s pension office.
4. After processing, you will receive confirmation regarding your successful migration to UPS.

How Will Pension Be Paid Under UPS?

Once you retire, your pension will be paid monthly from your accumulated fund, similar to the Systematic Withdrawal Plan (SWP) used in mutual funds. If the personal fund gets exhausted, payments will continue from a common government pool, ensuring lifetime pension security.

Why Was the Unified Pension Scheme Introduced?

Government employees have long demanded the reinstatement of the Old Pension Scheme (OPS), which guaranteed post-retirement income security. The NPS, while providing market-linked returns, lacked a fixed pension guarantee, creating uncertainty among employees. To address these concerns, the government introduced UPS, which blends features of both NPS and OPS, ensuring stable retirement income along with controlled investment opportunities.

Who Can Benefit from UPS?

• All central government employees currently under NPS are eligible to shift to UPS.
• State government employees are not automatically covered but can opt for UPS if their respective state governments approve the scheme.

Impact of UPS on Employees’ Financial Security

1. Stability of Retirement Income

With a fixed pension structure, retirees no longer have to worry about market fluctuations affecting their post-retirement income.

2. Dual Contribution Model

Since both employees and the government contribute, the overall pension fund grows faster, offering better financial security.

3. Choice of Investment

Employees can either stick to government’s default schemes or opt for private pension fund managers for potentially better returns.

4. Protection for Dependents

In case of the pensioner’s demise, spouses will continue receiving 60% of the pension, ensuring financial protection for families.

5. Higher Minimum Pension

Unlike NPS, which had no minimum pension guarantee, UPS ensures at least Rs.10,000 per month for those with 10+ years of service.

Final Thoughts on the NPS to UPS Migration

The launch of the Unified Pension Scheme marks a major shift in the Indian pension system. By ensuring a guaranteed pension, secure government contributions, and flexible investment options, UPS provides government employees with much-needed financial security. If you are a central government employee under NPS, shifting to UPS could offer a more stable and predictable post-retirement life.

Follow the step-by-step process outlined above to migrate smoothly from NPS to UPS and secure your retirement future with a guaranteed pension.