Notification of Integrated Pension Scheme released, central employees will be able to apply from April 1

Pension Fund Regulatory and Development Authority (PFRDA) on Thursday issued a notification regarding the Integrated Pension Scheme (UPS). Central government employees will be paid a pension that is 50 percent of their average pay received over the last 12 months at retirement. The notification is after January 24, 2025 notification of the government regarding UPS of central government employees under the National Pension System (NPS).

PFRDA said that the new rules will come into effect from April 1, 2025. Under this, central government employees, including central government employees serving in service till April 1, 2025, who come under NPS and newly recruited employees in central government services, who join service on or after April 2025, will be able to enroll. Enrollment and claim forms for all these categories for employees will be available online on the website https://npscra.nsdl.co.in from April 1, 2025. Apart from this, employees will also be able to submit the form physically.

The notification states that UPS or other payments will not be made in case the employee is removed or dismissed from service or resigns. The rate of full payment will be 50 percent of the average basic pay of 12 months immediately before retirement, subject to a minimum service of 25 years. The notification will give 23 lakh government employees the option to choose between UPS and NPS, which came into force on January 1, 2004. On August 24, 2024, the Union Cabinet headed by Prime Minister Narendra Modi approved the UPS.

Under the Old Pension Scheme (OPS), which was in effect before January 2004, employees received 50 percent of their last drawn basic pay as pension. Unlike the old pension scheme, the UPS is contributory. Under it, employees have to contribute 10 percent of their basic pay and dearness allowance while the employer (central government) contributes 18.5 percent. However, the final payout will depend on the market returns on the corpus. It is invested in government debt.