Deadline for exercising option under Unified Pension Scheme extended

The Finance Ministry on Monday (June 23, 2025) extended the cut-off date for exercising options under the Unified Pension Scheme (UPS) by three months till September 30.

Earlier, eligible government employees, retirees, and spouses of deceased retirees were given three-month time up to June 30 to exercise their option under the scheme.

In view of the representations received from various stakeholders requesting an extension, the Centre has decided to extend the cut-off date for exercising the option for UPS by three months till September 2025, the Finance Ministry said.

The UPS is applicable to the Central government employees who are covered under the National Pension System (NPS) and who choose this option under the NPS, which came into effect on January 1, 2004. The option to choose between the UPS and the NPS can be exercised by 23 lakh government employees .

On August 24, 2024, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the UPS.

Under the old pension scheme, which ended in January 2004, employees got 50% of their last drawn basic pay as pension.

Unlike the OPS, the UPS is contributory in nature, wherein employees will be required to contribute 10% of their basic salary and dearness allowance while the employer’s contribution (the central government) will be 18.5%.

However, the eventual payout depends on the market returns on that corpus, mostly invested in government debt.