Exciting Update: UPS Subscribers Now Eligible for Gratuity Benefits

The Ministry of Finance introduced UPS as an alternative under NPS in January. (AI image)

Great news for UPS subscribers! Central government employees who opt for the Unified Pension Scheme (UPS) can now enjoy retirement and death gratuity benefits. These benefits were previously only available under the Old Pension Scheme (OPS).

Union Minister of State for Personnel, Jitendra Singh, made this announcement. He confirmed that central government staff under UPS will receive these benefits. This is in line with the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.

This decision addresses a major request from government workers. It ensures that everyone gets equal retirement benefits, no matter which scheme they are under.

The Department of Pension and Pensioners’ Welfare (DoPPW) issued a directive on Wednesday. This directive covers options for OPS benefits in cases of service-related deaths. It also includes provisions for discharge due to invalidation or disability for central government servants under the Unified Pension Scheme.

Understanding UPS Retirement and Death Gratuity Benefits

The President of the All India NPS Employees Federation, Manjeet Singh Patel, is thrilled about this order. He calls it a significant and necessary government initiative. According to Patel, adding death-cum-retirement gratuity to UPS will remove uncertainties for employees. He noted that including OPS benefits for employees who face death or disability during service under UPS is a fair treatment.

Patel said, “Therefore, many employees will now opt for the UPS.”

Key Points to Remember:

• The Department of Pension and Pensioners’ Welfare introduced new rules in 2021. These rules address service matters for central government staff under NPS.
• Rule 10 in these regulations gives central government employees under NPS a choice. They can choose between NPS benefits or the Old Pension Scheme if they face death during service or discharge due to invalidation or disablement.
• The order states, “UPS has been notified as an option under the NPS. Therefore, central government civil employees who opt for UPS under the NPS shall also be eligible for benefits under UPS or other pension rules in case of death or disability.”
• The Ministry of Finance issued a notification on January 24. It introduced UPS as an alternative under NPS for central government civil service recruits, starting from April 1, 2025. This notification gives central government employees under NPS a one-time chance to opt for UPS.
• According to the order, central government employees choosing UPS under the National Pension System must submit Form 1 when joining service. This form lets them select benefits under UPS or other pension rules, applicable in cases of death, disability discharge, or invalidity retirement.
• The order says, “Existing government servants who have opted for the Unified Pension Scheme under the National Pension System shall also exercise this option as soon as possible after the notification of these clarifications.”
• The order was sent to all central government departments. It states that if a government servant dies while serving, their final option before death remains binding. The family cannot change it.
• Additionally, DoPPW released a separate order on Wednesday. It confirmed that central government staff under UPS qualify for retirement and death gratuity benefits. This is according to the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021.
• DoPPW Secretary Srinivas explained that this directive “brings parity between the NPS and UPS pensioners and they will be eligible for Rs 25 lakh gratuity also.”