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Ministry of Finance Introduces One-Time Switch from Unified Pension Scheme to National Pension System.

National | Dated: 28 Aug 2025

In August 2025, the Ministry of Finance (MoF) announced a one-time, one-way switch facility for central government employees, enabling them to migrate from the Unified Pension Scheme (UPS) to the National Pension System (NPS). The option will remain available until September 30, 2025.

🎯 Key Highlights:

  • - The newly announced switch facility allows central government employees enrolled under the Unified Pension Scheme (UPS) to shift to the National Pension System (NPS). This move aligns with the government’s efforts to provide greater flexibility in retirement planning and encourage long-term corpus building through the NPS framework.
  • - As per the guidelines, the option can be exercised by employees either within one year prior to their date of superannuation or up to three months before their deemed date of retirement in case of voluntary retirement.
  • - This provision ensures that employees nearing retirement still get a final opportunity to reassess their pension choices.

💡 Other Important Facts:

  • (i) A crucial condition is that once employees opt for the switch, they will permanently forfeit their rights under the UPS, including any assured payout benefits. The decision is irreversible, and employees cannot revert to the UPS after opting for NPS, highlighting the one-time and binding nature of this facility.
  • (ii) Upon making the switch, the exit and withdrawal provisions under the Pension Fund Regulatory and Development Authority (PFRDA) Exit & Withdrawal Regulations, 2015, will automatically apply. This will regulate the manner in which employees can access their retirement funds and annuities under the NPS framework.
  • (iii) The Government of India (GOI) has also clarified that a 4% differential contribution, calculated in line with the default investment pattern, will be credited into the employee’s NPS corpus at the time of exit. This ensures that government support continues even after migration to the NPS.

📚 Test Your Knowledge:

In August 2025, which ministry introduced a one-time switch facility from the Unified Pension Scheme (UPS) to the National Pension System (NPS)?

Correct Answer: Ministry of Finance

🚀 Quick Recap:

About Ministry of Finance (MoF)

  • Union Minister : Nirmala Sitharaman
  • Headquarters: New Delhi