The Unified Pension Scheme (UPS) is an option inside the National Pension System (NPS) for central government employees, in force from 1 April 2025. It adds an assured monthly payout, a family payout and a lump sum to the NPS account. The numbers come from the PFRDA (Operationalisation of UPS under NPS) Regulations, 2025, as amended in December 2025, and the CCS (Implementation of UPS under NPS) Rules, 2025. This post takes each formula from those texts and works it for three employees.
Scope: central civil employees under the CCS UPS Rules. Rule 2 of those rules excludes railway servants and the All India Services. Old-pension employees (joined before 2004), state employees and income tax on UPS payouts are out of scope. The examples are estimates for education only.
Who can be in UPS
- An existing central government employee in service on 1 April 2025 who is covered by NPS.
- A new recruit who joins central government service on or after 1 April 2025.
- An NPS employee who retired on or before 31 March 2025, or the spouse of such a retiree who died before opting.
What goes in every month
- Your contribution: ten percent of basic pay plus DA, credited to your own PRAN (regulation 6(1)).
- The government's matching contribution: an equal amount, also credited to your own PRAN (regulation 6(2)).
- The pool corpus: an additional government contribution estimated at eight and a half percent of basic pay plus DA, worked out on an aggregate basis for all UPS employees (regulation 7(1)). It is not in your account; it funds the payouts.
For a Level 6 basic of ₹58,600, basic plus 63% DA is ₹58,600 + ₹36,918 = ₹95,518. Ten percent is ₹9,551.80, rounded up to the next rupee (rules 6(1) and 7(1) of the CCS UPS Rules): ₹9,552 from you and ₹9,552 from the government. Under plain NPS the government's share is 14% (rule 11(4) refers to the 14% available under NPS).
The assured payout formula
Assured payout = (½ × P) × (Q ÷ 300). P is the average basic pay of the last twelve months before retirement, as certified by the Head of Office. Q is the months of qualifying service. If Q is more than 300 (25 years), it is taken as 300, so the full payout is half the twelve-month average basic. If Q is less than 120 (10 years), UPS does not apply. P is basic pay (with non-practising allowance where it applies). DA is not added to it.
Shorter service and the minimum payout
Between 10 and 25 years of service the payout is proportional: Q ÷ 300 scales it down (regulation 15(1)(iii)). Regulation 15(1)(ii) sets a floor of ₹10,000 a month for anyone with at least 120 months of qualifying service. The subscriber FAQ on the Protean CRA site adds that the minimum assumes regular contributions and no withdrawals.
Why your payout can come out smaller: the admissible payout
What you receive is the admissible payout = Assured payout × (IC ÷ BC) × (1 − FW%). IC is your individual corpus on the retirement date. BC is the benchmark corpus: what the account would hold if every contribution had arrived on time in the default pattern with no partial withdrawals. IC ÷ BC is capped at 1; a surplus is paid to you, and a shortfall can be topped up before retirement (regulations 11 and 15(1)(iv)). FW is the final withdrawal: up to 60% of the individual or benchmark corpus, whichever is lower, taken as cash, with the payout cut in the same proportion (regulation 15(2)).
The Gazette's worked example (Schedule V, Scenario 2) rounds the lump sum, the payout and the DR up to the next rupee, and the examples below do the same. Your PAO's rounding may differ.
Dearness relief
Regulation 17: dearness relief as declared by the central government is payable on the admissible payout and the family payout, only once the payout starts. The examples use the 63% DR for central pensioners from 1 July 2026; your UPS Payout Order lists the DR that applies (regulation 20).
Source: PIB, Ministry of Finance, 28 Oct 2026: Cabinet approves DA and DR w.e.f. 01.07.2026 (60% to 63%)
The lump sum at retirement
Regulation 14: Lump sum = (E ÷ 10) × L. E is the last basic pay plus DA on the retirement date. L is the completed six-month periods of qualifying service; part periods are ignored and there is no 25-year cap. It does not reduce the payout, and it is separate from the 60% final withdrawal and from gratuity, which the subscriber FAQ (citing a DoPPW OM of 18 June 2025) says UPS employees get under the NPS gratuity rules of 2021.
Source: Protean CRA: FAQs on UPS for Subscriber, 13 Sep 2025 (minimum payout conditions, VRS, DR, gratuity)
Example 1: proportional payout, Level 6, 18 years
A late entrant retires on 31 December 2026 with exactly 18 years (216 months) of qualifying service. With an increment on 1 July, basic pay was ₹56,900 from January to June 2026 and ₹58,600 from July to December 2026. Both are Level 6 cells.
- P: (₹56,900 × 6 + ₹58,600 × 6) ÷ 12 = ₹6,93,000 ÷ 12 = ₹57,750
- Assured payout: ₹57,750 ÷ 2 = ₹28,875, × 216 ÷ 300 = ₹28,875 × 0.72 = ₹20,790 a month
- Above ₹10,000, so no minimum. With no final withdrawal and a corpus at or above the benchmark, the admissible payout is ₹20,790.
- DR at 63%: ₹20,790 × 0.63 = ₹13,097.70, rounded up to ₹13,098
- Monthly payout: ₹20,790 + ₹13,098 = ₹33,888, until the next DR revision
- Lump sum: E = ₹58,600 + 63% DA ₹36,918 = ₹95,518. L = 216 ÷ 6 = 36. ₹95,518 ÷ 10 × 36 = ₹3,43,864.80, rounded up to ₹3,43,865
- With the full 60% final withdrawal: ₹20,790 × 0.40 = ₹8,316, plus DR ₹5,240 (₹5,239.08 rounded up) = ₹13,556 a month, plus 60% of the lower of the individual and benchmark corpus as cash.
Example 2: the minimum payout, Level 2, 11 years
A late entrant retires on 31 December 2026 with 11 years (132 months) of qualifying service. Basic pay was ₹24,500 for six months and ₹25,200 for six months, both Level 2 cells.
- P: (₹24,500 × 6 + ₹25,200 × 6) ÷ 12 = ₹2,98,200 ÷ 12 = ₹24,850
- Formula: ₹24,850 ÷ 2 = ₹12,425, × 132 ÷ 300 = ₹12,425 × 0.44 = ₹5,467
- ₹5,467 is below ₹10,000 and service is at least 120 months, so the assured payout is ₹10,000
- DR at 63%: ₹6,300. Monthly payout: ₹16,300
- Lump sum: E = ₹25,200 + ₹15,876 = ₹41,076. L = 132 ÷ 6 = 22. ₹41,076 ÷ 10 × 22 = ₹90,367.20, rounded up to ₹90,368
- With a 60% final withdrawal the regulation's formula applies to the ₹10,000 as well: ₹10,000 × 0.40 = ₹4,000, plus DR ₹2,520 = ₹6,520.
Example 3 (hypothetical): full payout, Level 7, 28 years
Hypothetical: this case cannot occur yet. The CCS UPS Rules cover employees appointed on or after 1 January 2004, so on that cut-off nobody has 25 years of service today. It shows the full-payout formula at today's pay cells and rates: 28 years (336 months), basic ₹99,800 for six months and ₹1,02,800 for six (Level 7 cells), DA and DR at 63%.
- P: (₹99,800 × 6 + ₹1,02,800 × 6) ÷ 12 = ₹1,01,300
- Q: 336 months is more than 300, so Q = 300 and the factor is 1
- Assured payout: ₹1,01,300 ÷ 2 = ₹50,650 a month
- DR at 63%: ₹31,909.50, rounded up to ₹31,910. Monthly payout: ₹82,560
- Lump sum: E = ₹1,02,800 + ₹64,764 = ₹1,67,564. L = 336 ÷ 6 = 56. ₹1,67,564 ÷ 10 × 56 = ₹9,38,358.40, rounded up to ₹9,38,359. The years beyond 25 still count here.
Estimates. Assumes the individual corpus is at least the benchmark corpus and DA/DR at 63%. Before income tax. Our calculation from the formulas in the PFRDA UPS Regulations.
Level 6, 18 years
- 12-month average basic
- ₹57,750
- Months (Q used)
- 216 (216)
- Assured payout
- ₹20,790
- DR 63%
- ₹13,098
- Monthly payout
- ₹33,888
- Lump sum
- ₹3,43,865
- Monthly payout with 60% withdrawal
- ₹13,556
Level 2, 11 years
- 12-month average basic
- ₹24,850
- Months (Q used)
- 132 (132)
- Assured payout
- ₹10,000 (minimum)
- DR 63%
- ₹6,300
- Monthly payout
- ₹16,300
- Lump sum
- ₹90,368
- Monthly payout with 60% withdrawal
- ₹6,520
Level 7, 28 years (hypothetical)
- 12-month average basic
- ₹1,01,300
- Months (Q used)
- 336 (300)
- Assured payout
- ₹50,650
- DR 63%
- ₹31,910
- Monthly payout
- ₹82,560
- Lump sum
- ₹9,38,359
- Monthly payout with 60% withdrawal
- ₹33,024
| Case | 12-month average basic | Months (Q used) | Assured payout | DR 63% | Monthly payout | Lump sum | Monthly payout with 60% withdrawal |
|---|---|---|---|---|---|---|---|
| Level 6, 18 years | ₹57,750 | 216 (216) | ₹20,790 | ₹13,098 | ₹33,888 | ₹3,43,865 | ₹13,556 |
| Level 2, 11 years | ₹24,850 | 132 (132) | ₹10,000 (minimum) | ₹6,300 | ₹16,300 | ₹90,368 | ₹6,520 |
| Level 7, 28 years (hypothetical) | ₹1,01,300 | 336 (300) | ₹50,650 | ₹31,910 | ₹82,560 | ₹9,38,359 | ₹33,024 |
Family payout
If a UPS pensioner dies, the legally wedded spouse gets a family payout for life of 60% of the admissible payout the pensioner was drawing (or was eligible for), plus DR (regulations 16 and 17, as substituted in December 2025). In Example 1, that is ₹20,790 × 60% = ₹12,474, plus DR at 63% of ₹7,859 (₹7,858.62 rounded up), or ₹20,333 a month.
Death in service works differently. Under rule 10 of the CCS UPS Rules each UPS employee files Form 1, choosing UPS benefits or family pension under the CCS (Pension) Rules, 2021 or the CCS (Extraordinary Pension) Rules, 2023, and can revise it before retirement. With no option on file, a death before 15 years of service defaults to CCS (Pension) family pension. Where UPS was chosen (or no option was filed and the default is UPS), the individual corpus goes to the spouse; if the employee had over 20 years of qualifying service, the spouse may instead take the lump sum, up to 60% final withdrawal and a family payout as if the employee had superannuated on the date of death (regulation 13A(5)). On the CCS (Pension) route, the government's contribution and its returns go back to the government.
Voluntary retirement, resignation and short service
- Voluntary retirement after 25 years: full assured payout, but it starts only the day after you would have superannuated, and DR with it (regulations 13(1)(c) and 20(3)).
- Voluntary retirement after 20 years of regular service (rule 13 of the CCS UPS Rules): a pro-rata assured payout (rule 13(6)).
- Retirement under FR 56 (not as a penalty) or the special voluntary retirement scheme: benefits as on superannuation (rule 14). Compulsory retirement as a penalty is handled under rule 20.
- Under 10 years of qualifying service: UPS does not apply (Q below 120).
- Resignation: the assured payout is forfeited and the individual corpus is paid out (rule 15(1)), except when you resign with permission for another central post, or after 10 years for a state government, PSU or autonomous body post (rule 15(2)).
- Removal or dismissal: the UPS option ceases (regulation 13(2)).
Choosing UPS over NPS: the deadlines and the switch back
- Existing employees and past retirees: the regulations gave three months from 1 April 2025. The cut-off was then extended to 30 September 2025 (as PFRDA's circular of 14 September 2025 records), and PFRDA's circular of 6 October 2025 extended it by two more months, to 30 November 2025. Option forms go to the DDO.
- New recruits from 1 April 2025: within 30 days of joining (regulation 3(2)(ii)), in Form A1 (regulation 4(1)(b)). Recruits who joined between 1 April and 31 August 2025 and had stayed in NPS got a one-time option up to 30 September 2025.
- If you do not opt in time, you are treated as having chosen to stay in NPS without UPS (regulation 4(5)).
- The switch back: a one-time, one-way switch to NPS, allowed up to twelve months before superannuation, three months before the deemed date of voluntary retirement, or at resignation or FR 56(j) retirement. It is not available on removal, dismissal or penal compulsory retirement, or while proceedings are pending or contemplated, but can be used within three months of exoneration. On switching, the government's share becomes 14%, the 4% difference for the UPS period is credited with returns, and the assured payout ends (regulation 3A, inserted December 2025; rule 11 of the CCS UPS Rules).
Source: PFRDA Circular PFRDA/2025/14/SUP-CG-SG/06, 6 Oct 2025: UPS option cut-off extended to 30 Nov 2025
UPS or NPS: what changes the answer
- Length of service. UPS does not apply below 10 years of qualifying service, and the payout keeps growing until 25 years.
- The final withdrawal. Taking 60% as cash cuts the monthly payout to 40% of the assured amount, for life and for the family payout too.
- Market returns. Under NPS the government's 14% stays in your own account. Under UPS a corpus below the benchmark cuts the payout unless topped up.
These are estimates for education, not advice. Your Head of Office certifies service and average pay, and the PAO issues the UPS Payout Order.
Central government pension guideSarkari Pay Calculator: find your pay matrix cellNPS calculator Excel sheetRetirement gratuity calculation for central government employeesFamily pension calculation (CCS Pension Rules)Frequently asked questions
- What is the minimum pension under UPS?
- ₹10,000 a month for anyone with at least ten years of qualifying service, under regulation 15(1)(ii) of the PFRDA UPS Regulations. DR is paid on top. A final withdrawal reduces it in proportion.
- What is the family pension under UPS?
- 60% of the admissible payout the pensioner was drawing, paid for life to the legally wedded spouse, with DR.
- Can I go back from UPS to NPS?
- Yes, once. The switch must be made at least twelve months before superannuation, three months before the deemed date of voluntary retirement, or at resignation or FR 56(j) retirement, and not while proceedings are pending. After switching, the government contributes 14% and the assured payout no longer applies.