Given the low response from central government employees, the government has extended the deadline to opt for the Unified Pension Scheme (UPS) by two months, until November 30, 2025. So far, out of 2.3 million eligible employees, only one lakh have chosen UPS. The new scheme will include contributions from both employees and the government, and pension benefits are assured.
UPS deadline: In light of the lukewarm response from central government employees towards the Unified Pension Scheme (UPS), the Ministry of Finance has extended its deadline by two more months to November 30, 2025. Implemented as an alternative to NPS from April 2025, UPS guarantees pension benefits to employees, with 10% contributed by employees and 18.5% by the government. However, only one lakh employees have adopted it so far, despite 2.3 million being eligible. Therefore, the government has provided additional time to allow employees the opportunity to make a decision.
Why the extension?
The Ministry of Finance clarified that several important changes have recently been made to the UPS scheme. These include benefits in cases of resignation or compulsory retirement, tax exemptions, and switch options. Additional time has been provided to ensure that employees can make well-informed decisions.
The government stated that there had been demands from various stakeholders for employees to be given more time to choose an option. This is why central government employees now have until November 30. This decision was made after approval from the Finance Minister.
What is the UPS Scheme?
The government introduced the Unified Pension Scheme as an alternative to NPS from April 1, 2025. This scheme is contribution-based, meaning employees must contribute 10 percent of their basic salary and dearness allowance, while the government will contribute up to 18.5 percent.
The biggest advantage of UPS is that employees will receive a definite pension benefit. While it does not offer the direct guarantee of the Old Pension Scheme (OPS), it will have a clear pension system, unlike NPS.
How many employees have joined so far?
Approximately 2.3 million central government employees across the country are eligible for this scheme. However, only one lakh employees have opted for UPS so far. The government had expected this number to be much higher. This is why the deadline has been extended, allowing employees to gather information and consider their options before joining.
Instructions issued to PFRDA
The Ministry of Finance has instructed the Pension Fund Regulatory and Development Authority (PFRDA) to make the necessary amendments to its systems and regulations to implement this change. The Ministry believes that, given the improvements and new features in the scheme, more employees may opt for UPS in the future.
So far, there has not been much enthusiasm for this scheme from government employees. Many employees still prefer a system similar to the Old Pension Scheme. Meanwhile, some employees state that they are taking time to understand the advantages and disadvantages of the scheme. This is why a large number of employees are still waiting.
Government's Expectations
The government hopes that more employees will join UPS, taking advantage of the new changes and the extended deadline. This is viewed as a significant reform to make the pension system stable and sustainable. The Ministry believes that this scheme will guarantee secure and clear pension benefits for employees in the future.
