Very Few Government Employees Opting for New Unified Pension Scheme, Only 1.35% have joined UPS

Unified Pension Scheme (UPS) was launched by the Government of India to provide a fixed pension to the central government employees. Employees were demanding the implementation of Old Pension Scheme but government introduced a new pension scheme – UPS. Experts thought that the new pension scheme would be warmly welcomed by the employees but the opposite has happened.

A recent Right to Information (RTI) reply has revealed that only a few Central Government employees have opted to shift from the existing National Pension System (NPS) to the newly introduced Unified Pension Scheme (UPS).

As of July 20, 2025, only 30,989 employees out of the approximately 23 lakh (2.3 million) enrolled in NPS have chosen to switch to UPS. This is just 1.35% participation, according to data shared by the Pension Fund Regulatory and Development Authority (PFRDA) in response to India Today’s query.

As many as 31,555 Central Government employees have opted for the Unified Pension Scheme (UPS) till July 20, 2025, and the last date to enrol under the scheme is September 30, 2025, the Parliament was informed on Monday (July 28, 2025.)

This data shows clearly that the central government employees are not satisfied with the new UPS pension scheme.

In a written reply in the Lok Sabha, Finance Minister Nirmala Sitharaman said as on July 20, 2025, at least 7,253 claims have been received and out of which 4,978 claims have been processed for payment of benefits under UPS.

Also Read: What is Unified Pension Scheme? Download UPS Pension Features PDF

Why Employees are not joining UPS Pension Scheme?

Despite the government’s efforts to promote the UPS as a more secure and guaranteed pension option, most employees are still hesitant to switch. Originally, the deadline to opt into UPS was June 30, 2025, but due to the low response, the government quietly extended it to September 30, 2025. After this deadline, no one will be allowed to shift from NPS to UPS.

Most employees still prefer the Old Pension Scheme (OPS), which offered a non-contributory and fixed pension, fully funded by the government. They want a defined and secure pension.” Many are either satisfied with the existing NPS, which provides flexibility and tax benefits, or are uncertain about the effectiveness of the new UPS.

NPS vs UPS Differences

Feature	National Pension System (NPS)	Unified Pension Scheme (UPS)
Type	Market-linked Investment Scheme	Hybrid Pension Scheme (Guaranteed pension with contribution model)
Applicable To	Government and private-sector employees, NRIs, self-employed individuals	Central government employees (may extend to state employees)
Employee Contribution	10% of basic salary + Dearness Allowance (DA)	10% of basic salary + Dearness Allowance (DA)
Government Contribution	14% of basic salary + Dearness Allowance (DA)	8.5% of basic salary + Dearness Allowance (DA)
Pension Calculation	Depends on investment performance and annuity plan	50% of average basic pay over the last 12 months (for employees with 25+ years of service)
Lump Sum Payout at Retirement	60% of corpus (tax-free), 40% annuitised	No
Family Pension	Depends on the annuity plan chosen	60% of the last pension drawn given to family
Inflation Protection (DA Revisions)	No guaranteed DA revision	Yes, inflation-linked adjustments
Tax Benefits	Tax deductions under Sections 80C, 80CCD (1B), and 80CCD (2)	Taxation details are yet to be clarified
Risk Factor	Market-dependent returns, no guaranteed pension	No market risk, assured pension
Gratuity Benefits	Yes	Yes
Flexibility in Investment	Choice of fund managers and investment options	Not applicable
Sustainability	Sustainable, self-funded through investments	Balanced approach with government support

Also Read: What is Unified Pension Scheme? Download UPS Pension Features PDF