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Centre brings parity in gratuity under old and new pension schemes
Central government employees under the Unified Pension Scheme (UPS) will be eligible for retirement and death gratuity benefits similar to those provided by the Old Pension Scheme (OPS), said Union Minister Jitendra Singh on Wednesday.
Long-pending demand fulfilled
The change 'addresses a significant demand of government staff and brings parity in retirement benefits,' Singh, who is minister of state for personnel, was quoted by PTI as saying.
Singh described the decision as part of the government's efforts to extend social security to all categories of employees under NPS.
The Department of Pension and Pensioners' Welfare (DoPPW) has issued an order enabling employees under UPS to avail of retirement and death gratuity benefits under the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.
Key changes and benefits
PTI quoted DoPPW Secretary V Srinivas as saying, 'The order gives an employee the option to revert to OPS in case of death in service. It is progressive in nature and addresses the clarifications being sought by employees.'
The new orders clarify that:
Government employees under UPS will receive retirement and death gratuity.
In case of death or invalidation during service, employees can opt for OPS benefits.
Gratuity up to Rs 25 lakh will be available under the amended rules.
PTI also reported that a separate order confirms the parity of benefits between UPS and OPS pensioners.
'The inclusion of death-cum-retirement gratuity in UPS will remove all the misconceptions of the employees,' said Manjeet Singh Patel, president of the All India NPS Employees Federation, according to PTI.
The Finance Ministry had earlier notified the introduction of UPS as an option under NPS starting April 1, 2025. According to PTI, the notification allows a one-time option to new central government recruits and requires existing UPS subscribers to formally choose between UPS and the CCS (Pension) Rules or Extraordinary Pension Rules.
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News18
39 minutes ago
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Unified Pension Scheme: Employees Now Eligible For Retirement, Death Gratuity Benefits, Says Minister
Last Updated: Jitendra Singh, the Minister of State for Personnel, says the new provision reflects government's commitment to ensure social security for all categories of employees under NPS. All central government employees part of the Unified Pension Scheme (UPS) will now be eligible for retirement and death gratuity benefits available under the Old Pension Scheme (OPS), Union Minister Jitendra Singh said on Wednesday. Responding to this long-pending demand by a large section of government employees, he said, the move addresses a significant demand of government staff and brings parity in retirement benefits. Singh, the Minister of State for Personnel, said the new provision reflects the government's commitment to ensure social security for all categories of employees under the National Pension System (NPS). Addressing a presser on the 'transformational" journey of the Ministry of Personnel, Public Grievances and Pensions over the last 11 years, he highlighted a series of reforms aimed at simplifying governance, empowering citizens, and humanising administration. Central government employees covered under the UPS will now be eligible for retirement and death gratuity benefits, as per the provisions of the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, Singh said. The Department of Pension and Pensioners' Welfare (DoPPW), under the Personnel Ministry, on Wednesday issued an order on the 'options to avail benefits under Old Pension Scheme on death of government servant during service or his discharge from government service on account of invalidation or disability for central government servants covered under Unified Pension Scheme". 'The order gives an employee the option to revert to OPS in case of death in service. It is progressive in nature and addresses the clarifications being sought by employees," DoPPW Secretary V Srinivas told PTI. President of the All India NPS Employees Federation, Manjeet Singh Patel, welcomed the order and termed it a historic and much-needed move by the government. Patel said the inclusion of death-cum-retirement gratuity in UPS will remove all the misconceptions of the employees. He said, the inclusion of OPS benefits in case of death or disability of any employee during the service under UPS is a great justice. 'Therefore, a lot of employees will opt for the UPS now," Patel said. The DoPPW had notified the Central Civil Services (Implementation of National Pension System) Rules, 2021, to regulate service-related matters of central government employees covered under the NPS. Under these, Rule 10 provides for the option to be exercised by every central government employee covered under the NPS for availing benefits under the NPS or the Old Pension Scheme in the event of death of a government servant during service or his discharge on the ground of invalidation or disablement. 'UPS has been notified as an option under the NPS. Therefore, it has been decided that the central government civil employees who opt for UPS under the NPS shall also be eligible for option for availing benefits under UPS or the CCS (Pension) Rules, 2021 or the CSS (Extraordinary Pension) Rules, 2023 in the event of death of the government servant during service or his discharge on the ground of invalidation or disablement," the order said. The finance ministry, on January 24, issued a notification regarding the introduction of UPS as an option under the NPS for recruits to the central government civil service with effect from April 1, 2025. It gives a one-time option to the central government employees covered under the NPS for inclusion under the UPS. Every central government servant who opts for the UPS under the National Pension System shall, at the time of joining the service, exercise an option in Form 1 for availing benefits under the UPS or under the CCS (Pension) Rules, 2021 or the CCS (Extraordinary Pension) Rules, 2023 in the event of his/her death or boarding out on account of disablement or retirement on invalidation, the order said. 'Existing government servants, who have opted for the Unified Pension Scheme under the National Pension System, shall also exercise such option as soon as possible after the notification of these clarifications," it said. In the case of the death of a government servant while in service, the last option exercised by the deceased employee before his death shall be treated as final, and the family shall have no right to revise the option, said the order issued to all central government departments. The DoPPW also issued another order on Wednesday to clarify that the central government employees covered under the UPS shall also be eligible for the benefit of retirement gratuity and death gratuity under the provisions of the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021. DoPPW Secretary Srinivas said this order 'brings parity between the NPS and UPS pensioners and they will be eligible for Rs 25 lakh gratuity also". Both these orders were released by Singh during the conference. What Is Unified Pension Scheme? The Union Cabinet in August 2024 approved the Unified Pension Scheme (UPS), for an assured pension post-retirement. The UPS has been implemented from April 1, 2025. The move comes after the long-pending demand of the central government employees to reform the new pension scheme (NPS). It is the latest pension scheme for government employees. Under the UPS, there will be a provision of a fixed assured pension, unlike the New Pension Scheme (NPS) which does not promise a fixed pension amount. The Unified Pension Scheme has five pillars: Assured Pension: Under the UPS, the fixed pension will be 50 per cent of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service period up to a minimum of 10 years of service. Assured Family Pension: It will also have an assured family pension, which is 60 per cent of the pension the employee was receiving. It will be given immediately in case of the retiree's demise. Assured Minimum Pension: In the case of superannuation after a minimum 10 years of service, the UPS has a provision of an assured minimum pension of Rs 10,000 per month. Inflation Indexation: There is a provision of indexation benefit on assured pension, on assured family pension and assured minimum pension. top videos View all Gratuity: Lump-sum payment at superannuation in addition to gratuity. It will be 1/10th of the monthly emolument (pay + dearness allowance) as on the date of superannuation for every completed six months of service. This payment will not reduce the quantum of assured pension. (With Inputs from PTI) About the Author Business Desk A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover More Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : National Pension Scheme (NPS) Location : New Delhi, India, India First Published: June 18, 2025, 19:19 IST News business » savings-and-investments Unified Pension Scheme: Employees Now Eligible For Retirement, Death Gratuity Benefits, Says Minister
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