Employees under Unified Pension Scheme now eligible for retirement, death gratuity benefits

New Delhi: 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.