Big Win for Retirees: Centre Approves Extra Pension Boost for NPS Pensioners

In a major relief to retired Central Government employees, the government has announced that those covered under the National Pension System (NPS) will now be eligible for additional pension benefits under the Unified Pension Scheme (UPS).  This benefit is available to those who have completed a minimum of 10 years of qualifying service and comes on top of the regular NPS entitlements already being drawn.

Those who qualify for these additional benefits are central government NPS subscribers with minimum 10 years of qualifying service, who retired on or before March 31. The last date to claim these benefits will be June 30, according to the release by Press Information Bureau (PIB).

There are three additional benefits that can be claimed under the UPS. The first one is one time-lumpsum payment, a monthly pension top-up, and interest on any arrears. This will be applicable for each completed six months of qualifying service. 

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"Monthly top-up amount is calculated based on admissible UPS payout dearness relief minus representative annuity amount under NPS," outlined the release. The third benefit will be arrears with simple interest, as per applicable PPF rates.

In cases where the subscriber is deceased, their legally wedded spouse is eligible to claim these benefits. The UPS offers enhancements over the existing NPS payouts, making it an attractive option for retirees seeking financial security.
Specifically, retirees will receive a lump sum equal to one-tenth of their last drawn basic pay plus dearness allowance for every completed six months of qualifying service, as per the release. This scheme encompasses various retirement circumstances, including superannuation, voluntary retirement, and retirement under FR 56(j).

In situations where the monthly NPS annuity falls short of the guaranteed pension under UPS, the government will provide a monthly top-up to make up the difference.

Moreover, retirees can now claim arrears with simple interest calculated at the prevailing Public Provident Fund (PPF) rates. This provision ensures that retirees receive a predictable and stable pension, addressing the variable nature of NPS payouts.

The UPS, which came into effect on April 1, 2025, aims to guarantee a fixed pension benefit. For individuals with a service period of 25 years or more, the scheme ensures a pension equivalent to 50% of the average basic pay over the last 12 months of service. This scheme is particularly significant for retirees seeking dependable financial support during their post-retirement years.