Unified Pension Scheme (UPS)

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Agenda
 Introduction & Key Objectives

 Eligibility & Enrollment

 How to Opt for UPS?

 Contributions Under UPS

 Eligibility & Benefits

 Payment of Benefits

 Benefits for Retired Employees

Under NPS (Before March 31, 2025)

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 Introduction
The Government of India, in pursuit of pension reform, introduced NPS for CG employee
w.e.f 01/01/2004, it replaced the defined benefit with a defined contribution system to
promote long term financial sustainability.

In the course of NPS implementation, various Central and SG stakeholders noted the need:

 Structured & Funded but predictable post retirement income mechanism.

 Inflation Indexation
 Pension Adequacy for Employee with shorter careers.
 Protection against longevity Risk

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 Eligibility Criteria
UPS is an option under the NPS for CG employees and is effective from 1st April, 2025.
It provides assured pay-out.

Applicability:
1. An existing CG employee covered under NPS, as on April 1st, 2025.
2. New recruit who joins CG service on or after April 1st, 2025.
3. A CG employee covered under NPS and superannuated or voluntarily retired or
retired under FR 56 (J) on or before March 31, 2025 and is eligible for UPS or their
legally wedded spouse as on date of superannuation/retirement, in case of demise.

Timelines to exercise UPS Option:

Within 06 months from 1st April 2025 (existing employees/retirees to claim benefits) and 30
days from joining (new recruits).

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 Eligibility Criteria
Assured payout available for:

1. Superannuation: Employees Completing at least 10 years of service and reaching the

superannuation age are eligible.

2. Compulsory Retirement (FR 56(j)): Employees retired by the govt. under FR 56 (j) are
eligible

3. Voluntary retirement(VRS): Employee who opt for VRS after 25 years of Service.

4. Payout starts only when they would have reached the superannuation age had
they continued.

Not Applicable for: Employees removed, dismissed, or resigned from service.

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 Enrolment and availing the benefits

 An employee can exercise the option to enroll under UPS in the following manner-
 New recruit opted UPS, A1 Form through online or to DDO.
 Migration from NPS to UPS, A2 Form to be submitted online or to DDO

Irrevocability: Option for UPS, once exercised is final and cannot be changed.

 Failing to exercise UPS option within prescribed timelines, shall be deemed to have
opted to continue under NPS without UPS option.

 Once UPS option exercised, NPS corpus of employees, will be transferred to the
employee’s individual corpus under the UPS.

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 Employee Contributions & Fund
Management
Types Of Contribution

Individual corpus Government Pool Corpus(For

Contribution Assured Payouts)
Employee contributes 10%
of (Basic Pay+ DA) 10% of (Basic pay + DA) to Additional 8.5%
the individual corpus contribution by the Govt.

The UPS, being a ‘fund-based’ system, relies on the regular and timely accumulation and its
investment, for assured payout to the employees.

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 Investment Options in UPS

 Investment choice under UPS :

 Default pattern (3 PFMs SBI, LIC & UTI)
 Active Choice : 100% G-sec,
 Auto Choice : LC-50 and LC-25

 Option to change the choice of pension fund once in FY and investment choice
twice in FY.

 ‘Default pattern’ of investment will prevail in case such option not exercised by
subscriber.

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 Benchmark Corpus (BC)
 It is a corpus based on which payout under UPS is calculated

 Transparently visible to subscriber online as well as in the SOT in the CRA system

 Value of Benchmark corpus is based on:

 Timely & regular contribution (employer and employee in the individual account)
 Contributions received prior to 1.4.2025, shall be considered as and when they
have been received and be valued on default pattern.
 Investment as per NAV of default pattern.
 In case of missing contributions, NAV of the last day of the month in which
contribution was to be received, shall apply

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 Individual Corpus (IC)
Actual Value of corpus based on:
 Investment choice made by subscriber.
 Contribution as and when received.
 Partial withdrawals will reduce the IC
 Voluntary contributions will be added to the IC
 Contributions for the period before the commencement of the qualifying service
under CG shall be added to the IC

 If the IC<BC, admissible payout shall be proportionately reduced, unless the

shortfall is replenished.
 If the IC>BC, the excess will be transferred to subscriber & full assured payout
will be made.

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 Computation of Benefits

 Lump Sum Payment: Based on last drawn salary and service duration.

 Assured Monthly Payout: 50% of average last 12 months’ basic pay.

 Minimum Guarantee: ₹10,000 per month (for at least 10 years of service).

 Proportionate Payouts: For those with 10-25 years of service.

 Final Withdrawal Option: Up to 60% of corpus.

 Family Payout: 60% of the last admissible payout to the spouse.

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 Additional Benefits

 If the IC > BC, the excess will be transferred to subscriber

 Dearness Relief (DR) : Paid as per Central Government rates.

 Service Considerations : Suspension, study leave, deputations counted as service

 Option of Partial Withdrawal : Similar to NPS

 Tax Benefits : Same as applicable to NPS

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 Benefits for Retired Employees Under
NPS (Before March 31, 2025)

 Lumpsum Payment: Based on service duration and last drawn salary.

 Monthly Top-Up: Difference of the admissible payout and the applicable annuity

 Dearness Relief (DR): As per Central Government rates.

 Interest on Arrears: Simple interest from retirement date until claim submission.

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 Benefits of UPS
Assured Monthly Pension

 Employees receive a guaranteed monthly pension after retirement, based on

their service duration.

Service Duration Pension Amount

25+ Years 50% of the last 12 month’s average Basic pay
Less then 25 years Proportionate Pension
At least 10 Years Minimum guaranteed pension of 10,000/ month

 If an employee’s individual corpus is less than the Benchmark Corpus, their

pension will be reduced proportionally unless they cover the shortfall.

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 Survivor benefits (Family Pension) &
Dearness Relief (DR)
 In case of death after retirement, the legally wedded spouse receives 60% of the pension
the employee was receiving.

 Employees receive Dearness Relief (DR) on their pension, just like serving employees
receive Dearness Allowance (DA).

Key Features:
 DR is calculated the same way as DA for active employees.
 DR is applicable to both: Assured pension (retired employees) & Family
pension (spouses of deceased employees)
 DR increases over time based on inflation rates.

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 Corpus Transfer at Retirement

1. At retirement, employees must transfer their Individual Corpus to the Pool Corpus.

2. comparison with Benchmark Corpus:

a. If Individual Corpus = Benchmark Corpus Full pension is paid
b. If Individual Corpus < Benchmark Corpus Employees can pay shortfall or Accept a reduced Pension
c. If Individual Corpus > Benchmark Corpus The excess amount is credited to the employee.

Benchmark Corpus = (Employee Contribution + Government Contribution) + Investment Growth

Where,
Investment Growth = Returns from Pension Fund investments(calculated using the default pattern set by
the PFRDA)
The Benchmark Corpus is the expected corpus amount an employee should have at the time of
superannuation(retirement) to receive the full assured pension. It is calculated using monthly
contributions, government contributions, and investment growth over the service period.
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 Lumpsum Payment at Retirement

Employees receive a one-time lump sumpayment upon retirement.

Example Calculation:
Lum Sum Amount Formula :
(1/10) x TotalEmoluments x L
For an employee retiring after 30 years (360 months):
Where, • Basic Pay= Rs.45,000
• DA (53% of Basic Pay) = Rs.23,850
• L = Number of completed half-year service • Total Emoluments= Rs.68,850
periods
• Total Emoluments = Basic Pay + Dearness
Allowance (DA) Lump Sum Payment:
(1/10) X 68,850 X 60 = Rs.4,13,100

Employees with less than

10 years of service are NOT eligible for a lump sum payout.

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 Scenario 1:

Full Pension (25+ Years Of Service)

• Employee Service: 25+ years (300 months)

• Total Corpus at Retirement: Rs.50,00,000
• Benchmark Corpus (expected corpus): Rs.50,00,000
• Pension Calculation:
Assured Payout = 50% x Average Last 12 Months' Basic Pay
= 50% x 45,000 = Rs.22, 500 + Dearness Relief (DR)

"Since the employee has served 25+years, they get the full pension amount."

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 Scenario 2:

Partial Pension (15 Years Of Service)

• Employee Service: 15 years (180 months)
• Total Corpus at Retirement: Rs.30,00,000
• Benchmark Corpus: Rs.30,00,000
• Pension Calculation :
• AssuredPayout = 50% x Average Last 12 Months' Basic Pay X service
300
= 50% x 45,000 x 180 = 13,500 + DR
300

The payout is proportionate because the employee served less than 25 years.

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 Scenario 3:

Minimum Guaranteed Pension (10 Years Of Service)

• Employee Service: 10 years (120 months)
• Total Corpus at Retirement: Rs.25,00,000
• Benchmark Corpus: Rs.25,00,000
• Pension Calculation:
Service
Assured Payout =50% x Average Last 12 Months' Basic Pay x
300

=50% X 45,000 X
120
= Rs. 9,000
300

Guaranteed Minimum Payout Rs.10,000 (Government assures at least

Rs.10,000 for those with 10+ years of service)

Even though the calculated payout is Rs.9,000, the government ensures a

minimum Rs.10,000.

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 Scenario 4:

Pension Reduction Due To Missing Contributions

• Employee Service: 25 years (300 months)

• Total Corpus at Retirement: Rs.45,00,000 (lower due to missing
contributions)
• Benchmark Corpus: Rs.50,00,000
• Pension Calculation:
Corpus
. x
AssuredPayout = 50% x Average Last 12 Months' Basic Pay
Benchmark Corpu s

50% x 45,000 x 45,00,000 = Rs.20,250+DR

50,00,000

The employee gets less than Rs. 22,500 because their total corpus is
less than the benchmark corpus due to missed contributions.

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 Scenario 5:

Pension Reduction Due To Partial Withdrawals

• Employee Service: 25 years (300 months)

• Total Corpus at Retirement: Rs.40,00,000 (lower due to withdrawals)
• Benchmark Corpus: Rs.50,00,000
• Pension Calculation:
Corpus
Assured Payout = 50% x Average Last 12 Months' Basic Pay x
Benchmark Corpus
50% x 45,000 x 40,00,000 = Rs.18,000+DR
50,00,000

The employee gets less pension because they withdrew money before retirement.

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 Scenario 6:

Higher Pension Due To Extra Investment

• Employee Service: 25 years (300 months)

• TotalCorpus at Retirement: Rs.55,00,000 (higher due to good investment choices)
• Benchmark Corpus: Rs.50,00,000
• Pension Calculation:
Assured Payout = 50% x Average Last 12 Months' Basic Pay = 22,500 + DR
Bonus: The employee gets an extra Rs 5,00,000 credited to their bank account.
Final Assured Payout: 22,500 +DR+ Rs. 5,00,000 lump sum.

This shows that good investment choices can result in extra retirement savings.

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 Scenario 6:

Pension Impact When Individual Corpus Is Less Than Benchmark

(a)If the Employee Does Not Cover the (b) If the Employee Covers the Shortfall
Shortfall- Partially-
• Employee Corpus at Retirement:
Rs.45,00,000 • Employee contributes Rs.2,50,000 extra,
making their corpus Rs.47,50,000.
• Benchmark Corpus: Rs.50,00,000
• Final Pension: Rs.21,375 +DR(slightly
• Final Pension: Rs.20,250 + DR (lower
improved payout).
payout)
If employees make upfor the shortfall,
The pensionis lower because the
they get better pension payouts.
employee didnot meet the benchmark
amount.

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 How to Opt for UPS?

 Existing Employees: Submit Form A2 to the DDO.

 New Recruits: Submit Form A1 to opt for UPS.

 Retired Employees: Submit Form B2 with KYC documents.

 Spouses of Deceased Employees: Submit Form B6 with KYC documents.

 Submission Methods: Online via CRA portal or physically via DDO

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 Process Flow

 Subscriber Registration  Migration (NPS to UPS)  Withdrawal

 DIY Mode  DIY Mode  DIY Mode

 Physical Mode  Physical Mode  Physical Mode

 Authorisation by Nodal  Authorisation by Nodal  Authorisation by Nodal

Office Office Office

 Data Processing at CRA  Data Processing at CRA  Data Processing at CRA

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 Process of Migration to UPS

Request Initiation by Subscriber (Online Mode)

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 Process of Shifting to UPS

The Subscriber needs to go to the link https://enps.nsdl.com/eNPS/NationalPensionSystem.html and

click on NPS To UPS Migration under the Unified Pension Scheme menu.

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 Process of Shifting to UPS

The Subscriber needs to provide his/her PRAN and DOB details and enter the captcha and click on
verify PRAN.

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 Process of Shifting to UPS

A One-time password (OTP) will be sent on either mobile number or Email ID of the Subscriber,
which has been registered in CRA. The Subscriber will be required to enter the OTP in the given box.

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 Process of Shifting to UPS

On submission of OTP, declaration to be provided by Subscriber and click on “Proceed to e-Sign”

option.

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 Process of Shifting to UPS

Subscriber must complete e-Sign verification by submission of Virtual Identification (VID- 16 digit no)
/Aadhaar details. On entering the VID/Aadhaar details, the Subscriber needs to select the tab “send OTP”.

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 Process of Shifting to UPS

OTP will be sent to the Subscriber on his/her mobile number registered with Aadhaar. The Subscriber
needs to enter OTP and click on verify OTP.

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 Process of Shifting to UPS

On successful verification, shifting request will get captured successfully and acknowledgement number
will be generated

The Subscriber can download e-Signed Subscriber shifting form (Migration form) from NPS to UPS for
future reference.

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Migration in UPS –Subscriber log-in
Migration in UPS –Subscriber log-in
 Process of Migration to UPS

Request by Subscriber (Offline Mode)

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 Process of Shifting to UPS (offline Mode)

Subscriber shall download and fill the Form A2 – UPS Subscriber Migration form - Government Sector
and provide it to DDO for request initiation in CRA.

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 Subscriber Registration in UPS

PRAN Generation (New recruits joining Central Govt. from 1-Apr-25)

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 Subscriber Registration for UPS

The Subscriber needs to go to the link https://enps.nsdl.com/eNPS/NationalPensionSystem.html and

click on Registration for UPS under the Unified Pension Scheme menu.

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 Subscriber Registration for UPS

Subscriber shall click on Register Now option.

Details to be provided and click on begin registration

 DOB
 PAN
 Mobile
 Email ID

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 Subscriber Registration for UPS

Subscriber shall provide Aadhaar Number to get the OTP.

Subscriber to provide DDO name/ Reg Number. PAO and ministry details will
be auto Populated.

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 Subscriber Registration for UPS

Subscriber to verify the details Investment option to be selected

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 Subscriber Registration for UPS

Bank details to be provided FATCA Details

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 Subscriber Registration for UPS

Personal details to be provided Mandatory upload of Appointment letter

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 Subscriber Registration for UPS

Generation of ACK ID
eSign to be done
SMS will be sent to Subscriber

Subscriber shall provide the ACK ID to

DDO for verification in CRA

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 Process of Shifting to UPS

Request Verification by DDO & Authorization by PAO

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 Process of Shifting to UPS

If Subscriber provides UPS Migration Forms (Form A2) to DDO then DDO to initiate request
by loging into www.cra-nsdl.com

DDO user (henceforth known as maker) is required to login into the CRA system (https://cra-
nsdl.com/CRA/) using the User ID and password.

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 Process of Shifting to UPS
The maker needs to click “Unified Pension Scheme” menu and click on option
“migration to UPS.”

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 Process of Shifting to UPS

The maker needs to select ‘Verify/Authorize’ option and enter PRAN to search the request.
DDO User can also search the request with ACK ID or Date range and click on ‘Submit’ button.

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 Process of Shifting to UPS
On clicking ‘Submit’ button, personal details and certain employment details of the
subscriber already registered in the CRA system will be populated in the screen.

It is the responsibility of the DDO to

verify the eligibility of the Subscriber
to migrate to UPS and also ensure
that the details entered are as per the
service records.

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 Process of Shifting to UPS
Once the maker clicks on submit, acknowledgement number will be generated and will
be displayed on the screen with the status as ‘The request for NPS to UPS migration is
raised and pending for verification

Under request status view option, status of

request initiated by DDO can be viewed
either on the basis of date range or
PRAN/Acknowledgement no. The Status
screen of the request initiated by DDO is as
follows

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 Process of Shifting to UPS
Once the maker clicks on submit, acknowledgement number will be generated and will
be displayed on the screen with the status as ‘The request for NPS to UPS migration is
raised and pending for verification

Under request status view option, status of

request initiated by DDO can be viewed
either on the basis of date range or
PRAN/Acknowledgement no. The Status
screen of the request initiated by DDO is as
follows

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 Process of Shifting to UPS

Request verification by PAO

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 Process of Shifting to UPS
PAO user (henceforth known as verifier) is required to login into the CRA system
(https://cra-nsdl.com/CRA/) using the User ID and password.

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 Process of Shifting to UPS
The verifier needs to select “Unified Pension Scheme” menu and click on option
“migration to UPS.”

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 Process of Shifting to UPS
The verifier is required to select verify options and enter PRAN/ Acknowledgement
details and click on submit button.

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 Process of Shifting to UPS
On submission, the search records will be displayed on the screen. Once the verifier
clicks on “Approve/Reject” link, all the details of a request will be displayed on the screen

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 Process of Shifting to UPS
The verifier can view the A2 form uploaded by the maker (DDO). Verifier needs to
verify the employment details.

In case of Rejection, the

verifier needs to select
the rejection category as
“employment details”
and provides remarks
and click on reject
button

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 Process of Shifting to UPS
In case, the details are correct, the verifier needs to select ‘Accept’ option and click
on Approve button.

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 Process of Shifting to UPS
On selecting the Approve button, the confirmation screen would appear where
verifier has to select either proceed or cancel button.

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 Process of Shifting to UPS
By clicking on “Proceed’ option, the request will get verified and the status will be
updated as ‘The request for NPS to UPS migration is pending for authorisation’

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  UPS ensures financial stability for government employees.

 Provides assured payouts, systematic contributions, and flexible investment choices.

 A comprehensive reform for a sustainable pension framework.

Thank You!
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