With just 35,000 subscribers, govt pins hopes on new pension rules

With just about 35,000 of over 23 lakh eligible central government employees having switched so far to the Centre's flagship Unified Pension Scheme (UPS), the government is pinning big hopes on the UPS rules notified last week, especially with several sweeteners now thrown in.

Running against a September 30 deadline for central government employees to opt for UPS, the Centre is, in fact, set to launch a mega drive to reach out to generate awareness on the 'sweetened' UPS option and urge them to opt for the same before the deadline. Similar rulebooks are also set to be notified for the All India Services, ET has gathered. ET gathers that communications are set to go out to all ministries and departments to sensitise over 23 lakh employees across over 28 services on the recently notified Central Civil Services (Implementation of the Unified Pension Scheme under the National Pension System) Rules, 2025. Top officials told ET that special focus will be on central government personnel serving in border areas and remote locations. The paramilitary forces are also a special group of concern as several personnel opt for Voluntary Retirement Scheme (VRS) among this segment. Central Armed Police Forces apart, the outreach will also focus on personnel posted far and wide- across Railways, Telecom and Postal services.

While the UPS was launched as a gamechanger pension reform in March this year, the response has been rather lukewarm over a range of issues- from concerns over inadequate financial security to requirement of 25 years of service for full pension benefits and the stringent 'family' definition. A worried Centre then set up a committee of Secretaries which made a slew of recommendations to address concerns raised by various pensioners and central government employees associations.

ET gathers that rounds of meetings were chaired by the Cabinet Secretary TV Somanathan to fine tune the UPS before the latest rulebook could emerge. It was, in fact, a committee chaired by Somanathan in 2023 that recommended a hybrid UPS format to address both- the concerns of government employees over market linked NPS vis a vis a guaranteed pension as well the Centre's full financial liability in the OPS model.

Key shifts have been made in the UPS rulebook, thereafter, to make it more attractive.

One of the biggest changes now is allowing full pension benefits at a minimum service period of 20 years instead of the 25 years proposed in April. Better financial security for the family of an employee in case of a disability or death during the period of employment has also been brought into the UPS.