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The DoPPW issues an Office Memorandum, explaining the rules governing resignation for central government employees covered under the Unified Pension Scheme
UPS has been notified as an option under the NPS.
The Department of Pension and Pensioners’ Welfare (DoPPW) has issued a clarification on the entitlement of central government employees under the Unified Pension Scheme (UPS) in case of resignation. The circular makes it clear that employees opting for UPS will forfeit their assured payout if they resign, though they will still be entitled to receive their accumulated pension wealth.
Circular on Resignation of Central Government Employees Under UPS
The DoPPW, under the Ministry of Personnel, Public Grievances and Pensions, issued an Office Memorandum on October 29, 2025, explaining the rules governing resignation for central government employees covered under the Unified Pension Scheme, introduced as an option under the National Pension System (NPS).
According to the memorandum, “Rule 15 of these rules provides for the entitlement on resignation from Government service of a Central Government servant opted for Unified Pension Scheme (UPS) under the National Pension System (NPS). The rule provides that on resignation from a Government service or a post, unless it is allowed to be withdrawn in the public interest by the appointing authority, entails the forfeiture of assured payout under Unified Pension Scheme.”
What Happens After Resignation?
The circular clarifies that while the assured payout under UPS will be forfeited upon resignation, the employee will still be entitled to receive the accumulated pension wealth in their individual corpus. This amount will be paid as a lump sum, in line with the regulations notified by the pension authority.
Timeline for Lump Sum Payment
The DoPPW circular specifies that the payment of the accumulated pension corpus will be made only after 90 days from the date the resignation becomes effective and the employee is formally relieved from duty.
If the Employee Dies Within 90 Days
The circular also outlines provisions for cases where a UPS subscriber dies within this 90-day period.
“If the subscriber dies before the expiry of ninety days from the date the resignation becomes effective, the accumulated pension wealth in the individual corpus shall be paid to the legally wedded spouse, or, if no legally wedded spouse exists, to the legal heir(s), in accordance with the regulations as notified by the Authority,” it states.
What Is the Unified Pension Scheme (UPS)?
The Unified Pension Scheme (UPS) has been introduced by the Central Government as an option under the NPS for central government employees, effective from April 1, 2025. The scheme offers an assured payout based on prescribed conditions and seeks to blend the benefits of a guaranteed pension with the flexibility of market-linked savings.
Can UPS Subscribers Switch Back to NPS?
Yes. The DoPPW has allowed a “one-time, one-way switch” facility for central government employees to revert from UPS to NPS at any point during their service, provided it is done within the following timelines:
- Twelve months prior to the date of superannuation.
- Three months prior to the deemed date of voluntary retirement.
- At the time of resignation or compulsory retirement under Fundamental Rule 56(j), which is not a penalty.
Implications of Switching from UPS to NPS
Employees who switch from UPS to NPS will become eligible for the employer’s contribution at 14% under the NPS framework. The circular further notes: “The additional four percent contribution for the period during which the subscriber was under UPS (before the switch facility becomes effective) shall be computed on the default investment pattern, as notified by the Authority, and credited to the NPS Account of the subscriber.”
Future contributions from the government will also be deposited at the 14% rate as per the Central Civil Services (Implementation of National Pension System) Rules, 2021.
Subscribers will have the flexibility to choose their investment options under NPS, and the PFRDA (Exits and Withdrawals under the National Pension System) Regulations, 2015 will apply.
However, once switched, such subscribers will no longer be eligible for the assured payout or other benefits under the Unified Pension Scheme.
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November 07, 2025, 15:05 IST
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