New Delhi: Today, September 30, 2025, is the final day for central government employees to switch from the Unified Pension Scheme (UPS) to the National Pension Scheme (NPS). Eligible employees can make this switch only once, and, as per the Department of Financial Services, they cannot move back to UPS once the change is made. It’s important for employees to act promptly to secure their preferred retirement plan.
Under the new pension system, employees can switch to the National Pension Scheme (NPS) at least one year before their superannuation or three months prior to voluntary retirement. For those eligible, including past retirees under NPS, the last date to opt for the Unified Pension Scheme (UPS) is September 30, 2025. It’s important to complete the process within this timeline to secure the preferred retirement plan.
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Employees facing removal, dismissal, or compulsory retirement as a penalty are not eligible to switch to the National Pension Scheme (NPS). The option is also unavailable for those with ongoing or contemplated disciplinary proceedings, according to the official notice.
Employees who fail to switch within the given timeframe will remain enrolled in the Unified Pension Scheme (UPS) by default. Those who continue under the National Pension Scheme (NPS) will not have the option to move to UPS after September 30, 2025, making it crucial to act before the deadline.
While employees can switch from the Unified Pension Scheme (UPS) to the National Pension Scheme (NPS) at a later date, the move is one-way only—once switched, they cannot revert to UPS. This option is designed to give Central Government employees the flexibility to make informed choices for their post-retirement financial planning.
The government has clarified tax rules, ensuring parity between NPS and UPS for the 2025–26 fiscal year. Contributions from both employers and employees qualify for deductions under Sections 80CCD(1) and 80CCD(2) of the Income Tax Act, while withdrawals of up to 60% of the corpus at retirement are tax-exempt under Section 10, including partial withdrawals of employee contributions.
To help employees make informed decisions, a government-backed UPS-NPS calculator is available on the National Pension Trust website, allowing users to simulate retirement benefits based on years of service, salary, and projected corpus. With no extension expected beyond September 30, employees are now carefully evaluating the long-term returns, tax advantages, and flexibility offered by each scheme.
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