The Union Government on Monday announced that Central Government employees under the Unified Pension Scheme (UPS) can opt to switch back to the National Pension System (NPS), subject to specific conditions.
According to an office memorandum from the Finance Ministry, this one-time, one-way switch must be exercised at least one year before superannuation or three months prior to voluntary retirement, whichever is earlier. Similar provisions apply in cases of resignation and compulsory retirement under Rule 56(J), with minor adjustments.
Employees who miss the prescribed timelines will continue under UPS by default. The ministry clarified that the facility will not be available in cases of removal, dismissal, compulsory retirement as a penalty, or if disciplinary proceedings are pending or contemplated.
Once an employee opts for the switch, their retirement benefits will be governed by the PFRDA (Exit & Withdrawal under NPS) Regulations, 2015. The government’s differential contribution of 4% will be credited to the individual’s NPS corpus at exit, while assured payouts under UPS will cease.
All ministries and departments have been instructed to inform eligible officers and staff about the order.
