Key Details About Unified Pension Scheme That Government Employees Should Know Before April 2025

Securing one’s financial life is one of the most crucial aspects or agendas of an individual’s life. To help people with this, the government of India launched a formal pension system and separate governing bodies for the same such as the Pension Fund Regulatory and Development Authority (PFRDA). The pension system underwent various updates and models, one of which is the Unified Pension Scheme (UPS).

Recently, the Pension Fund Regulatory and Development Authority (PFRDA) introduced some new changes in the Unified Pension Scheme to make the lives of central government employees (working or retired) easier.

Read the article to learn more details about the newly launched rules and their expected impact on government employees.

New Rules Of UPS

The Pension Fund Regulatory and Development Authority (PFRDA) launched some new rules concerning the Unified Pension Scheme under the National Pension Scheme (NPS). The rules are collectively referred to as the PFRDA (Operationalisation of UPS under NPS) Regulations, 2025.

The major details about the newly announced rules of UPS are laid down below for one’s reference and better understanding:

1. Clarity On Terms

The PFRDA (Operationalisation of UPS under NPS) Regulations, 2025 clarifies some terms and defines the same such as ‘Admissible Payout’, ‘Family Payout’, and ‘Default Pattern’.

2. Who Can Opt For The Scheme?

The central govt employees (including existing employees, newly recruited employees, and retired pensioners) covered under NPS can opt for UPS if they like. Please note that in cases where a pensioner has died, their wives will be eligible to opt for the scheme and reap its benefits.

3. How To Opt For UPS?

Interested employees need to apply for UPS within 3 months from April 1st, 2025 except newly recruited employees as they are required to opt for UPS within 30 days of their joining. Please note that once UPS is chosen, one cannot go back and change it again.

Withdrawal of Funds Under UPS

If a retired pensioner wants to withdraw from his UPS funds or if after his death his wife wants to make a withdrawal, they can withdraw 60% of the total amount.

However, if working employees are interested in making a withdrawal, they can make a partial withdrawal of 25% only 3 times after a lock-in period of 3 years. The partial withdrawals will only be given under special circumstances such as children’s higher education or marriage, purchasing residential properties, illness-related expenses, or learning new skills.