How choosing between UPS and NPS will affect your retirement benefits
The original deadline to UPS was June 30, but it was extended until September 30 to give employees more time to decide. During this period, several changes were made by the government for the UPS rules and the Pension Fund Regulation and Development Authority (PFRDA).
The deadline is approaching to choose between the current National Pension System (NPS) and the United Pension Program (UPS), which entered into force on 1 April. The original deadline to UPS was June 30, but it was extended until September 30 to give employees more time to decide. During this period, several changes were made by the government for the UPS rules and the Pension Fund Regulation and Development Authority (PFRDA).
What is UPS?
UPS is a fund -based pension system based on regular contributions from both the employer (central government) and the employee. These contributions are deposited to ensure monthly retirement guaranteed to retirees.
Central government employees, including civilian personnel in defense services that participated and choose UPS on 1 January 2004, are covered by the National Pension System (NPS).
However, UPS, CCS rules are not available for employees within the scope of 2021. This includes contract workers, all Indian services, railway personnel, daily or daily ranking workers and unexpected situation employees.
Existing employees may choose UPS until September 30th. New recruitment that started on April 1, 2025 or after you have 30 days than participating to choose.
How different from UPS NPs?
While the UPS guarantees a pension based on the employee’s last salary, NPs refunds market connected, depending on the performance of stocks and debt tools.
NPS pensions are subject to market fluctuations, whereas UPS pensions carry low risk as they are guaranteed.
NPS payments depend on Corpus accumulated with investments. The UPS provides a minimum of 10,000 RS per month after 10 years of service.
Tax Advantages within NPS and UPS
Up to 14% (NP) and 10% (UP) employer contributions are exempt from income tax. UPS also contributes 8.5% from the government. When an employee under NPS chooses UPS, they cannot return to NPS.
