Centre allows one-time switch from Unified Pension Scheme to NPS – Check terms

Centre on Monday allowed the Central Government employees under the Unified Pension Scheme (UPS) to switch back to the National Pension System (NPS), subject to specific conditions.

In an office memorandum, the Finance Ministry said a one-time, one-way switch facility will be available to all UPS subscribers. The option must be exercised at least one year before superannuation or three months before voluntary retirement, whichever is applicable. Similar provisions will apply in cases of resignation and compulsory retirement under Rule 56(J), with minor changes.

If the option is not exercised within the prescribed timelines, employees will continue under UPS by default. The ministry clarified that the switch facility would not be permitted in cases of removal, dismissal, compulsory retirement as a penalty, or where disciplinary proceedings are pending or contemplated.

Once an employee opts to switch, the PFRDA (Exit & Withdrawal under NPS) Regulations, 2015 will govern their retirement benefits. The government’s differential contribution of 4% will be credited to the individual’s NPS corpus at exit, while assured payouts and UPS benefits will no longer be available.