Daijiworld Media Network - New Delhi

New Delhi, Aug 4: The Centre has no proposal to amend or replace the Unified Pension Scheme (UPS), which will continue as an optional pension scheme under the National Pension System (NPS), Finance Minister Nirmala Sitharaman informed the Lok Sabha on Tuesday.

In a written reply, Sitharaman said the UPS was introduced as an option for Central government employees covered under the NPS and that there was currently no proposal to modify or replace it.

"UPS has been introduced as an option for the employees of the Central government who are covered under the NPS. As on date, there is no proposal under consideration to make any changes or replace the UPS," she said.

The minister said that as of July 19, 2026, a total of 1,18,404 employees, including new recruits, serving employees and eligible retirees, had opted for the scheme.

The Unified Pension Scheme came into effect on April 1, 2025, with the objective of providing greater certainty in post-retirement income while retaining the contributory framework of the National Pension System.

Unlike the NPS, under which pension depends on the accumulated corpus and market-linked returns, the UPS offers an assured pension subject to prescribed eligibility conditions.

Eligible employees under the UPS are entitled to a pension equal to 50 per cent of their average basic pay during the last 12 months before retirement, along with inflation-linked revisions.

In the event of a pensioner's death, eligible family members are entitled to receive a family pension amounting to 60 per cent of the employee's pension.

The scheme also covers eligible retirees who retired on or before March 31, 2025, after completing at least 10 years of regular service, as well as legally wedded spouses of eligible deceased retirees.

Sitharaman said that since the scheme has been operational only from April 2025, no formal review of its implementation or performance has yet been undertaken.

The government had earlier extended the deadline for employees to opt for the UPS till November 30, 2025, following requests from employee organisations seeking additional time.

Employees choosing the UPS continue to be eligible for retirement and death gratuity under the Central Civil Services (CCS) Rules, 2021. In cases of death in service, invalidation or disablement, subscribers may also avail benefits provided under the applicable CCS Rules.

The government has also extended the tax benefits available under the NPS to employees opting for the UPS.

Employees who shifted from the NPS to the UPS were given a one-time, irrevocable option to revert to the NPS.

While the Old Pension Scheme (OPS) provided a government-funded pension equivalent to 50 per cent of the last drawn basic pay along with applicable dearness allowance, the NPS is based on employee and government contributions and market-linked returns.

The UPS retains the contributory structure of the NPS but assures a pension equal to 50 per cent of the average basic pay drawn during the final 12 months of service, subject to the scheme's prescribed conditions.