Finance ministry allows 1-time switch from new pension scheme to NPS
New Delhi, Aug 25: The Finance Ministry has introduced a one-time, one-way switch option for Central Government employees under the Unified Pension Scheme (UPS) to shift to the National Pension System (NPS).
According to an official notification, this facility is available to UPS subscribers up to one year before their superannuation or three months before voluntary retirement.
Employees facing dismissal, removal, or disciplinary action will not be eligible.
The Department of Expenditure (DoE) in the Ministry of Finance is likely to put out operational framework for implementing the unified pension scheme (UPS). This framework will outline the modalities for various scenarios.
According to a Finance Ministry notification, “It has been decided that a one-time, one-way switch facility from UPS to NPS shall be made available to all central government employees who have opted for UPS”.
Once the switch is exercised, employees will no longer be entitled to UPS benefits, including assured payouts. The government's 4 per cent differential contribution will be added to the individual's NPS corpus at the time of exit, following PFRDA norms.
The memorandum directs all ministries and departments to inform eligible officials of this provision. This move aims to streamline pension benefits and provide flexibility while reinforcing NPS as a long-term retirement solution.
Recently, Finance Minister Nirmala Sitharaman said that 7,253 claims under the Unified Pension Scheme (UPS) have been received, out of which 4,978 claims have been processed for payment of benefits (as on July 20).
As per the eligibility criteria, there are 25,756 retired Central government subscribers eligible to receive additional benefits under UPS, the minister informed the Parliament.
UPS has been introduced as an option under NPS for the employees of the Central government who are covered under the NPS. There is no proposal under consideration to extend such benefits to other pension schemes or sectors.
