Central Government of India has announced full parity in gratuity benefits for pensioners under the National Pension System (NPS) and the newly introduced Unified Pension Scheme (UPS).
Union Minister of State for Personnel Jitendra Singh announced the move on June 18, 2025.
It addresses a long-standing demand from government staff and aligns retirement benefits across different pension schemes.
NPS and UPS: What the New Policy Entails
Under the revised rules, all central government employees enrolled under NPS and UPS will now be eligible for retirement and death gratuity benefits up to ₹25 lakh, the same as those available under the Old Pension Scheme (OPS).
The Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021 govern this parity.
These rules have now been extended to cover UPS subscribers as well.
The Department of Pension and Pensioners’ Welfare (DoPPW) issued two key orders to implement this change.
One order confirms gratuity parity across pension schemes.
The other allows UPS employees to opt for OPS benefits in case of death, invalidation, or disability during service.
Background: What Is the Unified Pension Scheme (UPS)?
The Unified Pension Scheme (UPS) was introduced as a hybrid pension model.
It aims to bridge the gap between the market-linked features of NPS and the guaranteed benefits of OPS.
The Unified Pension Scheme (UPS) will be effective from April 1, 2025.
It offers a guaranteed pension of 50% of the average basic salary over the last 12 months before retirement, for employees who have completed at least 25 years of qualifying service.
UPS retains the flexibility offered by NPS, allowing market-linked benefits and choice.
At the same time, it incorporates the security features of OPS, making it an attractive option for both new recruits and existing NPS subscribers.
The government contributes 18.5% to the retirement fund, while employees contribute 10% of their basic pay and dearness allowance.
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