How to Migrate from NPS to UPS: The central government has given its employees the option of shifting to Unified Pension Scheme (UPS) from National Pension System (NPS). Under UPS, employees will get a fixed monthly pension after retirement. The scheme has come into force from 1 April 2025.
What is UPS (Unified Pension Scheme)?
UPS is a fund-based pension scheme, which contributes both employees and the government. The scheme offers a fixed monthly pension, which will be based on the average salary before retirement.
What is the difference between NPS and UPS?
The NPS is connected to the market, in which the return depends on the stock market and bonds. There will be guaranteed pension in UPS.
The risk in NPS is high, as it is dependent on the market, while UPS is a low -risk option.
The pension amount in NPS depends on investment, while the UPS has a guarantee of at least ₹ 10,000 monthly pension. This pension will be available when there is 10 years of service.
There will also be a benefit of tax-free contribution up to 14% in UPS, as well as the government will also contribute an additional 8.5%.
Once choosing UPS, employees cannot go back to NPS.
How will there be a calculation of pension in UPS?
Before retirement of the employee, 50% of the average basic salary of 12 months will be found in the form of monthly pension.
The entire guaranteed pension will be given after completing 25 years of service.
If the service period is between 10 and 25 years, then the ratio pension will be available, but the minimum guarantee of Rs 10,000 will be there.
Pension to employees taking voluntary retirement (VRS) will start from their general retirement age.
Employee contribution: 10%of Basic Salary + Dearness Allowance (DA).
Government’s contribution: 10% + 8.5% additional (total 18.5%) of Basic Salary + DA.
How to change UPS?
Online method
Https://www.npscra.nsdl.co.in/ups.php.
Click on the UPS Migration page.
Select UPS option and fill the necessary information.
Submit the form and get confirmation.
Offline method
Get UPS Migration Form.
Fill all the necessary information.
Submit it to the concerned government office.
Who will get the benefit of UPS?
Currently, UPS has been implemented only for central government employees. State governments will make separate decisions for their employees to adopt it. Whatever employees want to shift from NPS to UPS, they will have to apply in time.
What will employees benefit from UPS?
The UPS guarantees a fixed income after retirement, which will protect their financial future. The additional contribution of the government (8.5%) makes it more beneficial. This scheme is a good option for employees who want to avoid market risk and want permanent pension.
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