The unified pension scheme regulations were released as a gazette notification on March 19th 2025.
We have extensively covered the UPS earlier: If you have not yet understood how the UPS works, start with the second or third link below.
- Revised UPS vs NPS Calculator after Jan 2025 Gazette Notification
- Unified Pension Scheme Formula Explained
- How does the Unified Pension Scheme work? Should you opt for it?
- Using Withdrawal Rates to compare Unified Pension Scheme and National Pension Scheme
- Why I prefer the National Pension Scheme to the Unified Pension Scheme
- A thumb rule to decide between Unified Pension Scheme and National Pension Scheme
Here are some interesting sentences from the UPS regulations that caught my eye.
- Those eligible for UPS should opt for it within three months from 1st April 2025 or within such extended timelines, if any, allowed by the Central Government.
- The legally wedded spouse in case of a subscriber who has superannuated or retired and has demised prior to exercising the option for UPS is also eligible for UPS.
- The switch from NPS to UPS or the decision to stay with UPS: The option, once exercised, shall be final and irrevocable.
- A person eligible to exercise the option and who does not exercise the UPS option under NPS within the timelines laid down (as above) shall be deemed to have opted to continue under NPS without the UPS option
- UPS Subscriber may, in addition to his UPS account, have additional account under NPS (Tier I and Tier II) on a voluntary basis under All Citizen model.
- The UPS, being a ‘fund-based’ system, relies on the regular and timely accumulation and investment of applicable contributions (from both the employee and the employer) for assured payout to the employees
post superannuation or retirement, as the case may be - The assurance of timely and regular payout of benefits under UPS shall depend upon the adequacy of funds under individual and pool corpus.
- There will be a pool corpus with additional contributions from the Central Government. 8.5% of (basic pay + Dearness Allowance) of all employees who have chosen the Unified Pension Scheme option to the pool corpus on an aggregate basis.
- As we pointed out earlier, this pool corpus is meant to make UPS sustainable and guarantee payouts. This will not help individual employees in any way (except when the pension is lower than Rs. 10,000 and is set as Rs. 10,000)
- The investment pattern to be used for computing the projected benchmark corpus has not been mentioned! See: Unified Pension Scheme Formula Explained
- The Benchmark Corpus value shall be based on the default pattern’s net asset value (NAV) and the corresponding units in the benchmark corpus. In respect of missing contribution(s), for any period, the net asset value shall be based on the last working day of the month in which contribution(s)is to be received, for the period from 01st April 2025, and the same shall be declared for each month by the Authority.