Finance Minister Nirmala Sitharaman informed the Parliament that the Centre has no proposal to amend or replace the Unified Pension Scheme, which will continue as an optional scheme under the National Pension System.
As of July 19, 2026, a total of 1,18,404 employees, including new recruits, serving employees and eligible retirees, have opted for the UPS, according to the government.
“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,” the Finance Minister said in a written reply to a question in the Lok Sabha.
The Unified Pension Scheme came into force on April 1, 2025. It was introduced to provide greater certainty over retirement income while retaining the contributory structure of the NPS.
Unlike the NPS, where retirement income depends on market-linked returns and the accumulated corpus, the UPS provides an assured pension subject to specified eligibility conditions.
Under the UPS, eligible employees receive a pension equivalent to 50 per cent of their average basic pay during the last 12 months before retirement. The scheme also provides inflation-linked revisions.
In case of the pensioner’s death, eligible family members can receive a family pension equivalent to 60 per cent of the employee’s pension.
The scheme also covers certain eligible retirees who retired on or before March 31, 2025, provided they completed at least 10 years of regular service. Eligible legally wedded spouses of expired retirees are also covered.
The scheme has been operational only since April 2025, meaning the Centre has not yet undertaken a formal review of its implementation or performance, Sitharaman said.
The government had earlier extended the deadline for employees to choose the UPS until November 30, 2025, following requests from employee organisations and associations for additional time.
Employees opting for the UPS continue to receive certain benefits available under the Central Civil Services rules. These include retirement gratuity and death gratuity under the Central Civil Services (CCS) Rules, 2021.
In cases of death in service, invalidation or disablement, UPS subscribers can also opt for benefits available under the applicable CCS Rules. The government has also extended the tax benefits available to NPS subscribers to employees choosing the UPS.
Employees who switched from the NPS to the UPS were provided a one-time and irrevocable option to return to the NPS.
The Old Pension Scheme (OPS) provided a pension linked to 50 per cent of the last basic pay along with applicable dearness allowance and was fully funded by the government.
Under the NPS, retirement income is based on the accumulated corpus and market-linked returns, with contributions from employees and the government.
The UPS, meanwhile, follows a contributory model but provides an assured pension of 50 per cent of the average basic pay of the final 12 months, subject to the scheme’s conditions.
