New Delhi: The Department of Pension and Pensioners’ Welfare (DoPPW) has issued a fresh clarification regarding the Unified Pension Scheme (UPS) for central government employees. The circular states that if an employee resigns while under the UPS, they will lose their assured monthly pension benefit, but they will still be allowed to withdraw the pension savings they have accumulated. This clarification aims to remove confusion among employees about what they are entitled to in case they decide to leave their job before retirement.
The Department of Pension and Pensioners’ Welfare (DoPPW) has released a new Office Memorandum dated October 29, 2025, explaining what happens when a central government employee resigns while being covered under the Unified Pension Scheme (UPS). The UPS was introduced as an optional alternative within the National Pension System (NPS), and this clarification aims to help employees better understand their benefits if they choose to leave government service before retirement.
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The memorandum states that Rule 15 of the Unified Pension Scheme lays out the rules for employees who decide to resign. Simply put, if a central government employee resigns while under the UPS, they will lose the benefit of the assured monthly pension. This assured payout is only guaranteed for those who retire normally or under eligible conditions.
However, if the resignation is officially withdrawn in the public interest — something that only the appointing authority can allow — then this forfeiture does not apply. In all other cases, resignation means the assured pension benefit will not be given.
The Unified Pension Scheme (UPS) is a new pension option introduced by the central government for its employees, effective from April 1, 2025. It aims to provide the assurance of a fixed pension amount while still allowing employees to build pension savings through market-linked investments. In simple terms, UPS tries to combine the security of old pension-style benefits with the growth opportunities of the National Pension System (NPS).
Yes, central government employees who choose the Unified Pension Scheme still have the option to switch back to the National Pension System (NPS) — but this switch can only be done once in their entire service period. This is a one-time and irreversible move.
The switch must also be made within specific time limits, such as within 12 months before retirement, within 3 months before taking voluntary retirement, or at the time of resignation or compulsory retirement (if it is not imposed as a penalty). This gives employees flexibility to reconsider their pension choice based on their personal and financial situation.
The circular explains that if an employee resigns while under the UPS, they will lose the assured monthly pension benefit. However, this does not mean they lose everything. The amount they have already contributed and accumulated in their pension account will still belong to them. This accumulated pension wealth will be paid out as a lump sum, as per the rules laid down by the pension authority.
As per the circular, the accumulated pension amount will not be released immediately after resignation. The payout will be made only after 90 days from the date the resignation takes effect and the employee is officially relieved from service. This timeline allows the authorities to complete all necessary verification and processing before releasing the funds.
The circular also explains what happens if a UPS subscriber dies within the 90 days after their resignation takes effect. In such a case, the accumulated pension amount in their account will be paid to their legally wedded spouse. If there is no spouse, the amount will be given to the legal heir(s), as per the rules laid down by the pension authority. This ensures that the pension wealth does not go unclaimed.
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