The government has kept the option open for existing and new employees to choose either NPS or UPS. Employees will have the option to opt for UPS under NPS or continue with NPS without UPS option.
NPS & UPS: The Unified Pension Scheme (UPS), which provides guaranteed pension to central government employees, is going to start from April 1. Current and newly recruited employees will be able to apply for this new pension scheme either online or offline. The special thing is that while applying, employees will also have to choose the option of their registered pension fund and investment pattern so that their deposited funds can be invested properly and they can get good returns. This method will work on the lines of the National Pension Scheme (NPS).
This will be the contribution pattern
1. Personal Deposit Fund: The 10% contribution made by the employee will be deposited in this fund. Along with this, the 10% contribution made by the government will also be deposited. This will be managed by pension funds.
2. Pool Deposit Fund: The government will contribute an additional 8.5% to this fund. This fund will be invested in government schemes.
Investment options in personal funds
– Employees who choose UPS will get the option to choose an investment pattern on the lines of NPS. Also, a registered pension fund will have to be chosen.
That is, members can invest their personal deposits in any investment scheme prescribed by the pension regulator PFRD. The benefit from this will be directly given to the employee.
If the employee does not choose any investment scheme, then it will automatically go to the default pattern. In this situation, the member’s fund will be invested in the investment schemes prescribed by PFRD.
On choosing a registered pension fund, there will be many investment options.
1. The entire fund can be invested in government securities. Or
2. One will have to choose the option of one of these life-cycle based schemes.
– Conservative Fund: The maximum investment limit in equity will be up to 25%
– Moderate Fund: The maximum investment limit in equity will be up to 50%
Partial withdrawals will be possible
Along with this, after completion of three years from the date of joining UPS, members can withdraw up to 25 percent of their personal fund. Withdrawals can be made a maximum of three times during the entire scheme. If withdrawal has been made earlier under NPS, it will also be counted in this. Some conditions will apply for withdrawal, which members will have to fulfill.
You will be able to choose only one pension scheme
The government has kept the option of choosing either NPS or UPS open for current and new employees. Employees will get the option to choose UPS under NPS. Or continue NPS without UPS option. Once the option is chosen, it cannot be changed.
Know which form to fill
1. Current employees: Existing employees joining government service after 1 January 2004, who have opted for NPS, can choose UPS. They have to fill Form A2.
2. Newly recruited employees: New employees joining the service on or after 1 April 2025 can also choose this option. They have to fill Form A1.
3. Retired personnel: Employees who have retired and were associated with NPS can also join UPS. They have to submit Form B2 along with KYC documents.
4. In case of death of the employee: In case of death of the employee, the legally married spouse has to submit Form B6 along with KYC documents.
How to apply online to move from NPS to UPS
1. The employee must first visit the link https://enps.nsdl.com/eNPS/NationalPension System.html. Then click on NPS To UPS Migration under the Unified Pension Scheme menu.
2. Then enter PRAN and date of birth. After this, verify by entering captcha. This will send OTP to the registered mobile number of the member. Enter it. This will open a new declaration window.
4. Read it and agree and then click on Proceed to e-Sign option.
5. After this, complete the e-Sign verification by entering the Virtual ID (VID – 16 digit number) or Aadhaar details.
6. Once the verification is successful, the transfer request will be successfully registered and an acknowledgement number will be generated.
This is how you can apply offline
- The eligible employee has to submit the appropriate form (eg A1, A2 and B2) related to the process in his office (eg DDO or PAO) or the concerned nodal office.
- The DDO will check the form as per the service record of the employee and complete the request process through the CRA transaction website
