Deadline Alert: Central Government Employees Must Choose Between UPS and NPS Pension Schemes by September 30

Eligible UPS employees have only one opportunity to switch to NPS without the option to revert back.

New Delhi:

Today marks the final deadline for central government employees to transition from the market-linked National Pension System (NPS) to the newly established Unified Pension Scheme (UPS). Eligible employees who fail to make the switch before September 30 will automatically remain under the NPS framework.

The government extended the original June 30 deadline to September 30, providing employees additional time to evaluate their pension alternatives. Following this deadline, those who remain with NPS will permanently forfeit the opportunity to opt for UPS under any circumstances.

The Ministry of Finance officially announced earlier this month, "The last date for eligible employees and past retirees under NPS to opt for UPS is September 30, 2025."

"This initiative aims to provide informed choice to Central Government employees in planning their post-retirement financial security. By opting for UPS, the employees retain their choice for switch to NPS at a later date," the ministry further stated.

Key Guidelines to switching from UPS to NPS

According to the Finance Ministry, the specific conditions for switching from the Unified Pension Scheme (UPS) to the National Pension System (NPS) are:

- Eligible UPS employees can only switch to NPS once and cannot switch back.

- The switch must be made at least one year before superannuation or three months prior to voluntary retirement, whichever is appropriate.

- Those who do not choose the switch within the specified time will continue to use UPS by default.

- The switch option will not be available in the event of removal, dismissal, or involuntary retirement as a penalty, or in circumstances where disciplinary proceedings are ongoing or planned.

- Employees who choose to remain in NPS are not eligible for UPS after September 30

What Is UPS, and How Is It Different From NPS?

The Unified Pension Scheme (UPS) was introduced by the Government of India as an alternative option under the National Pension System (NPS) for Central Government employees. It became effective on April 01, 2025.

UPS operates as a fund-based system with contributions from both employees and employers. Unlike the market-linked NPS, UPS provides an assured pension with a guaranteed minimum payout, lower risk exposure, and additional benefits including gratuity, ensuring enhanced financial security for retirees.

Central government employees appointed on or after January 1, 2004, who are currently under NPS are eligible to opt for UPS. However, those already covered by the CCS (Pension) Rules, 2021, railway servants, casual/daily-rated employees, contingency staff, All India Services, contract employees, and other specific categories are not eligible to apply.

Currently serving employees can select UPS until September 30. New employees joining on or after April 1, 2025, will have 30 days from their joining date to choose UPS.