One-Time Switch Option from Unified Pension Scheme (UPS) to National Pension System (NPS) for Central Government Employees
The Department of Pension and Pensioners’ Welfare (DoPPW), under the Ministry of Personnel, Public Grievances and Pensions, has issued a new Office Memorandum dated 29th October 2025 introducing a one-time, one-way switch facility for Central Government employees who have opted for the Unified Pension Scheme (UPS) under the National Pension System (NPS) Rules, 2025.
This significant update gives employees greater flexibility in choosing between the Unified Pension Scheme (UPS) and the National Pension System (NPS)—ensuring that they can make an informed choice based on their long-term retirement goals.
Key Highlights of the Office Memorandum
1. One-Time, One-Way Switch Facility
Rule 11 of the Central Civil Services (Implementation of Unified Pension Scheme under the National Pension System) Rules, 2025 provides that a Central Government employee who has enrolled under the Unified Pension Scheme (UPS) may revert to the National Pension System (NPS) once during their service.
However, this is a one-time and irreversible option—meaning once an employee switches back to NPS, they cannot revert to UPS again.
2. Time Limits for Exercising the Option
The option to switch back from UPS to NPS can be exercised only within specific time frames, depending on the employee’s service condition:
- Not later than 12 months prior to the date of superannuation
- At least 3 months before the deemed date of voluntary retirement
- At the time of resignation or compulsory retirement under Fundamental Rule 56(j) (if not imposed as a penalty)
These time-bound provisions ensure that the switch is made well before the retirement process begins.
3. Restrictions on the Switch Facility
The switch option cannot be availed in the following situations:
- If departmental or judicial proceedings are pending or contemplated against the employee.
- If the employee faces removal, dismissal, or compulsory retirement as a penalty.
In such cases, the employee will continue under the Unified Pension Scheme (UPS) as per existing rules.
4. Continuation under UPS in Absence of Option
If an employee does not exercise the switch option within the specified period, they will automatically continue under the Unified Pension Scheme (UPS) without any change in their pension structure.
5. Contributions and Benefits After the Switch
For employees who opt to switch from UPS to NPS:
- They will become eligible for Central Government contribution at the rate of 14%, as applicable under the NPS Rules, 2021.
- The additional 4% contribution (for the period served under UPS) will be computed based on the default investment pattern and credited to their NPS account.
- Future contributions will continue to be deposited monthly into the employee’s NPS account, and the subscriber may choose their preferred investment options.
- The PFRDA (Exits and Withdrawals under NPS) Regulations, 2015 will apply to such subscribers.
- Once switched, they will no longer be eligible for assured pension payout or other UPS benefits.
6. Implementation Across Ministries and Departments
All Central Government Ministries, Departments, and subordinate offices have been directed to ensure strict implementation of this switch facility. The authorities handling UPS/NPS matters must inform eligible employees and assist them in exercising their option as per the notified rules.
Conclusion
The Government’s decision to introduce this one-time switch facility reflects its commitment to employee welfare and financial flexibility. By allowing employees to move from Unified Pension Scheme (UPS) back to National Pension System (NPS), the government ensures that individuals can align their retirement planning with their personal financial preferences.
For detailed rules, employees are advised to refer to the Central Civil Services (Implementation of Unified Pension Scheme under NPS) Rules, 2025, and contact their respective Department’s pension wing for procedural guidance.