SDG 16: Peace, Justice and Strong Institutions
Institution: Ministry of Personnel, Public Grievances & Pensions
The Department of Pension and Pensionersβ Welfare has notified in the Gazette (2 September 2025) the Central Civil Services (Implementation of the Unified Pension Scheme under the National Pension System) Rules, 2025. These rules provide a one-time switch option for central government employees who had earlier opted for the Unified Pension Scheme (UPS), allowing them to switch to the National Pension Scheme (NPS), subject to conditions. Eligible employees can exercise the switch only once, and may do so at least one year before superannuation or three months before voluntary retirement. The switch is not allowed in cases of dismissal, removal, compulsory retirement as penalty, or if disciplinary proceedings are ongoing. Those who do not opt for the switch by 30 September 2025 will remain under UPS. Subscriber switching will receive NPS benefits plus a differential 4% contribution amount.
This amendment offers greater choice and flexibility to government employees in pension planning, shifting the balance between defined benefit and defined contribution pension models. For policymakers, this raises questions about how to manage liabilities under UPS, ensure awareness & compliance, and maintain fairness between those switching and those not. It may also influence pension fund flows in the NPS and affect the financial administration of UPS obligations.
Relevant Question for Policy Stakeholders:
How will the government ensure that employees are adequately informed about the benefits and trade-offs of switching, that the switching process is smooth, and that pension fund agencies can manage the fiscal & administrative implications of potential large-scale switching?
Follow the full news here: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2166789