The clarification comes amid discussions around the implementation of UPS, which was introduced as an option under the National Pension System (NPS) for eligible Central government employees.
The scheme became effective from April 1, 2025 and aims to provide assured pension benefits after retirement while continuing with a contributory pension framework.
As of July 19, 2026, over 1.18 lakh employees, including new recruits, existing employees and past retirees, had opted for UPS, Sitharaman said.
“UPS has been introduced as an option under NPS for the employees of the Central Government who are covered under the NPS. As on date, there is no proposal under consideration to make any changes or replace the UPS,” she said in the reply.
What is UPS and who can opt for it?
UPS was introduced to provide greater predictability of retirement income for Central government employees covered under NPS. Unlike the market-linked nature of NPS, UPS provides an assured payout structure, along with inflation-linked adjustments.
The scheme was made available to Central government employees covered under NPS. It was also extended to eligible past retirees who retired on or before March 31, 2025, provided they had completed at least 10 years of regular service, along with the legally wedded spouses of eligible deceased retirees.
The government said UPS was designed to address employee concerns around assured pension after retirement while maintaining a funded and contributory pension model.
Government yet to review UPS performance
Since UPS came into effect only from April 1, 2025, the government has not undertaken a review of its implementation and performance so far, the Finance Minister said.
The government had earlier extended the deadline for opting for UPS to November 30, 2025 following representations from employees and associations.
Other benefits extended to UPS subscribers
The government has extended certain benefits available under NPS to employees opting for UPS. These include retirement gratuity and death gratuity under the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021.
Employees covered under UPS will also have the option to avail benefits under the CCS (Pension) Rules, 2021 or the CCS (Extraordinary Pension) Rules, 2023 in cases of death during service or discharge due to invalidation or disablement.
The government has also extended tax benefits available to NPS subscribers to employees opting for UPS.
Additionally, employees who have chosen UPS have been provided a one-time, one-way switch facility to move back to NPS.
-With PTI inputs
