The Rajya Sabha held a discussion on March 11, 2025, regarding the recently introduced Unified Pension Scheme (UPS) under the National Pension System (NPS). During the session, Shri Javed Ali Khan raised an unstarred question (No. 1382), seeking clarifications on assured payouts, voluntary retirement, and gratuity benefits under the new scheme. Minister of State for Finance, Shri Pankaj Chaudhary, responded with key details about the scheme’s structure and benefits.
Assured Payouts for Voluntary Retirement
One of the main concerns raised was whether employees opting for voluntary retirement after completing 25 years of service would receive assured pension payouts from their notional superannuation date, as mentioned in the Gazette Notification dated January 24, 2025.
In response, the Finance Minister confirmed that payouts under UPS will start from the date an employee would have superannuated, had they continued in service. This approach ensures that pension funds remain sustainable while allowing employees to receive structured benefits.
The Minister explained that this policy is based on the growth of pension funds over the actual service period of employees, ensuring a balance between individual benefits and long-term financial stability of the pension system.
Gratuity Benefits Under UPS
Another major query was whether gratuity would be provided under UPS, similar to the Old Pension Scheme (OPS) and NPS.
The Minister clarified that gratuity is payable under UPS as per the Central Civil Services (Payment of Gratuity under NPS) Rules, 2021. These rules are already in force for employees covered under NPS, ensuring that government employees continue to receive gratuity benefits under the new scheme.
Government’s Position on UPS
The government’s response in the Rajya Sabha confirmed that UPS is a fund-based pension scheme operating under NPS principles. It guarantees both assured payouts and gratuity benefits for eligible employees.
However, employees choosing voluntary retirement must consider that their pension payouts will begin at their original superannuation age, rather than immediately after retirement.
This discussion provided much-needed clarity on UPS, helping central government employees understand their pension rights and benefits under the new scheme.
