NPS News: Big update regarding pension of government employees, Finance Ministry issued notification

News, Digital Desk- ( New Pension Rules) The central government has given a big relief to the employees retired under the National Pension System (NPS). 

The Finance Ministry has announced that central employees who retired on or before March 31, 2025 and completed at least 10 years of service can now avail additional pension benefits under the Unified Pension Scheme (UPS). 

These benefits will be in addition to the NPS benefits they are already getting. Legally married spouses of deceased employees can also avail the benefits of this scheme.

What is the new rule?

This new facility will benefit the beneficiaries in two ways. They will get a lump sum payment equal to one-tenth of their last basic salary and dearness allowance (DA), which will be calculated on the basis of every six months of service. 

In addition, a top-up amount will also be added to their monthly pension. This top-up will be equal to the difference between the amount received by combining the traditional pension (UPS) and dearness relief and the annual pension received from NPS.

The government has also announced that eligible beneficiaries will also get simple interest on the outstanding pension, which will be calculated on the basis of PPF (Public Provident Fund) rate.

How will you get its benefit?

The application process to avail this scheme can be done through two modes - online and offline (physical mode). Beneficiaries applying in physical mode have to contact their nearest Drawing and Disbursing Officer (DDO) and submit the relevant form. 

Form B2 has been prescribed for the subscriber, while Form B4 or B6 has been prescribed for his legal spouse. These forms can be downloaded from www.npscra.nsdl.co.in/ups.php.

How to apply?

Interested beneficiaries can apply online by visiting the UPS portal. To apply, one has to login to the website and fill the form. The last date is 30 June 2025, so all eligible persons should complete the application process on time.

Who will get its benefit?

The Pension Fund Regulatory and Development Authority (PFRDA) has notified the Unified Pension Scheme (UPS) under the NPS Regulations 2025, effective from April 1, 2025. 

The scheme will cover three categories of central government employees. The move is aimed at streamlining the pension system and standardizing pension benefits for government employees-

The first category includes those employees who are in service till April 1, 2025 and come under NPS.

The second category includes new employees who will be appointed in the Central Government service on or after April 1, 2025.

The third category includes employees who have retired on or before March 31, 2025, have taken voluntary retirement or have terminated their service under Rule 56(j).

Further, if the employees falling in these categories have died and had not opted for UPS, their legally married spouse can also avail this benefit.