Central Govt Employees can take VRS after 20 years
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The Department of Pension and Pensioners’ Welfare has issued a notification in the Official Gazette on September 2, 2025, introducing the Central Civil Services (Implementation of the Unified Pension Scheme under the National Pension System) Rules, 2025. These rules will regulate the service matters and benefits under the Unified Pension Scheme (UPS) for Central Government employees who choose UPS as an option under NPS.
According to the rules, UPS subscribers will now have the option to take voluntary retirement after completing 20 years of service. But there are certain issues with this.
Employees taking VRS after 20 years will not get full assured payout. The full assured payout under the Unified Pension Scheme will be available only after completing 25 years of qualifying service. If an employee opts for voluntary retirement after 20 years or more, they will receive a pro-rata assured payout, calculated as the number of qualifying service years divided by 25 of the assured payout. The payout will begin from the date of superannuation.
| Years of Service | Assured Payout (%) |
|---|---|
| 20 years | 80% |
| 21 years | 84% |
| 22 years | 88% |
| 23 years | 92% |
| 24 years | 96% |
| 25 years | 100% |
In addition to the assured payout, employees will also get other retirement benefits such as:
- Final withdrawal of 60% of the individual corpus,
- Lump sum benefit of one-tenth of Basic Pay plus Dearness Allowance for every six months of service,
- Retirement gratuity,
- Leave encashment, and
- CGEGIS (Central Government Employees Group Insurance Scheme) benefits.
Family Pension Rules
The rules also clarify that if an employee dies after taking voluntary retirement but before the start of the assured payout, the legally wedded spouse will be entitled to receive family payout from the date of the subscriber’s death.
However, on the death of both the subscriber and legally wedded spouse, there is no provision of FP to any other family members. The accumulated corpus in the subscribers PRAN linked with UPS will be dealt as per PFRDA (Operationalisation of Unified Pension Scheme Under National Pension System) Regulations, 2025.
