Entitlement on Discharge Due to Disablement Under Unified Pension Scheme (UPS) 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 (O.M.) No. 57/03/2022-P&PW(B)/8361 dated 29th October 2025. This circular clarifies the entitlement rules for Central Government servants covered under the Unified Pension Scheme (UPS) of the National Pension System (NPS) who are discharged from service due to disablement.
Let’s understand the key points and implications of this important notification.
What is the Unified Pension Scheme (UPS) under NPS?
The Unified Pension Scheme (UPS), governed by the Central Civil Services (Implementation of Unified Pension Scheme under NPS) Rules, 2025, is a new framework introduced to integrate pension benefits under NPS with certain defined benefits similar to the old pension system.
It is applicable to Central Government civil employees who have opted for UPS under NPS and are governed by the rules notified in 2025.
Disablement Entitlement Under Rule 18 of UPS Rules, 2025
According to Rule 18 of the new UPS Rules, the entitlement on discharge due to disablement depends on the option exercised by the employee:
- If the employee opted for benefits under the Central Civil Services (Pension) Rules, 2021 or Extraordinary Pension Rules, 2023:
- The individual can receive benefits in line with the Extraordinary Pension Rules, 2023 if disablement is attributable to government service.
- The Head of Office is responsible for processing and disbursing benefits under these rules.
- If the employee opted for benefits under UPS itself:
- The benefits will be granted as per the Pension Fund Regulatory and Development Authority (PFRDA) (Operationalisation of Unified Pension Scheme under NPS) Regulations, 2025.
Treatment of Individual Pension Corpus in Case of Disablement
When a subscriber chooses to receive benefits under the Extraordinary Pension Rules, the following actions are taken:
- The individual UPS corpus (the pension account under NPS) will be closed.
- The Government’s contribution and its returns in that corpus will be transferred back to the Government account.
- The remaining balance (the employee’s own contribution and returns) will be paid to the subscriber in a lump sum.
This ensures a fair settlement for employees who are medically boarded out due to service-related disability.
Additional Benefit: Death Gratuity
In cases where a Central Government servant under UPS is discharged due to invalidation or disablement, and has availed benefits under UPS, they are also eligible for death gratuity.
This benefit is provided in accordance with Rule 22 of the Central Civil Services (Payment of Gratuity under NPS) Rules, 2021.
This provision offers financial relief and support to affected employees and their families during such critical circumstances.
Implementation by Ministries and Departments
The Office Memorandum emphasizes that all Ministries, Departments, and subordinate offices must ensure strict implementation of these provisions.
Officials handling pensionary and service-related benefits are directed to take due note of these rules to avoid delays or discrepancies in granting entitlements.
Key Takeaways
- Rule 18 of UPS Rules, 2025 defines disablement entitlements for NPS subscribers under UPS.
- Employees discharged due to service-related disablement can receive benefits either under Extraordinary Pension Rules or UPS regulations, depending on their chosen option.
- The UPS pension corpus is settled accordingly based on the option exercised.
- Death gratuity is payable under NPS Gratuity Rules, 2021 in such cases.
- The notification ensures a fair and structured process for handling disablement-related pension benefits.