What UPS offers
The Unified Pension Scheme, effective from 1 April 2025, is an option for central government employees covered by NPS. It adds an assured pension on top of the NPS framework:
| Feature | Rule |
|---|---|
| Assured pension, 25+ years | 50% of average basic pay of the last 12 months |
| 10 to 25 years | Proportionate: 50% × service ÷ 25 years |
| Minimum pension | ₹10,000 a month after at least 10 years |
| Dearness relief | Added to the assured, minimum and family pension |
| Family pension | 60% of the pension |
| Lump sum | One-tenth of monthly pay (basic + DA) for every completed six months of service |
| Contribution | Employee 10%, government 18.5% of basic + DA |
Worked example
Average basic ₹80,000, last basic ₹81,000, 28 years of service, DR at 63%:
- Assured pension: 50% of ₹80,000 = ₹40,000 basic pension, plus 63% DR = ₹65,200 a month.
- Lump sum: ₹81,000 × 1.63 ÷ 10 × 56 half-years = ₹7,39,368, paid in addition to gratuity.
- Family pension: 60% of ₹40,000 = ₹24,000, plus DR = ₹39,120 a month.
With 20 years of service instead, the basic pension would be proportionate: 50% × ₹80,000 × 20 ÷ 25 = ₹32,000.
UPS or NPS?
UPS suits employees who value certainty: a known, inflation-linked pension and a family pension. NPS may give a bigger corpus if markets do well, and lets more of it be taken as a lump sum. Employees who joined before UPS had a window to choose; a choice of UPS is generally final. Read the latest PFRDA and Department of Expenditure rules before deciding, because details such as how the lump sum interacts with the assured payout are set out in the official regulations.
Compare with the market-linked NPS calculator. Your retirement gratuity is separate — see the gratuity calculator — and DA changes flow through as DR — see the DA calculator.