When the Unified Pension Scheme (UPS) was announced as an option in place of the National Pension System (NPS) for around 24 lakh central government employees, employee unions and experts flagged multiple issues in the scheme. One of the issues they raised pertained to the denial of pension benefits till actual superannuation on voluntary retirement under UPS.
A section of employees and unions, representing lakhs of central government-serving staff and pensioners, have long been demanding the scrapping of the NPS, which was introduced in 2004 after the scrapping of the Old Pension Scheme (OPS). Armed forces were kept out of the NPS purview. In view of continued demands from various quarters, the Centre last year announced the UPS, combining some features from both the NPS and OPS. So far, the UPS has been a non-starter for the government, even after 5 months of its launch, with just about 1% of employees opting for the new scheme.
Among several issues flagged by the unions and employee bodies, one issue has been the delay in starting pension benefits for employees opting for the voluntary retirement scheme (VRS).
Last month, the Government Employees National Confederation (GENC) had a meeting with the Secretary, Department of Pension & Pensioners’ Welfare (DoPPW). In the meeting, the GENC, an affiliate of Bhartiya Mazdoor Sangh (BMS) raised several key issues related to the Unified Pension Scheme.
Long wait for pension benefits in case an employee opts for VRS under UPS
This has been a contentious issue when it comes to opting for UPS. An employee, if he opts for VRS under UPS, becomes eligible for a pension only after he reaches the age of superannuation. The GENC pointed out the issue, saying the UPS pension is only payable at the age of 60 for those who opt for VRS. This provision makes post-retirement life tough for retirees as they need to wait for years without a pension.
In response to the issue raised by the confederation, the secretary has assured that the Department of Pension & Pensioners’ Welfare will come out with a suitable clarification and look for a resolution.
The Secretary also took note of other UPS issues like making contributions under UPS, discrepancy in qualifying service for full pension, one-time opportunity for OPS option to left-out employees, among others.
What is the last date to opt for UPS by central government employees?
The new deadline to opt for the OPS is September 30, 2025. The scheme was available till June 30 earlier but extended by 90 days later till September 30 with an aim to give employees another chance to subscribe the scheme with some added features.
To attract more government employees, the government sweetened the offer with UPS allowing one-time switch facility to the NPS for the employees. This switch decision, however, has to be made before one year before superannuation or three months before voluntary retirement, whichever is applicable.