Unified Pension Scheme (UPS): Features and UPS vs NPS vs OPS
Why in the news
The Unified Pension Scheme began on 1 April 2025, with more detail on cost, investment and how it differs from NPS and OPS.
Key facts
- Cost: ₹6,250 crore recurring each year plus ₹800 crore arrears.
- Investment: a final strategy was due in 3-4 months; benchmarks include EPFO’s 5-15% equity via ETFs, Canada Pension Plan (40-50%) and Japan’s GPIF (about 25%). A default equity-bond mix applies meanwhile.
UPS, NPS and OPS compared
| Parameter | UPS | NPS | OPS |
|---|---|---|---|
| Payout basis | 50% of last 12 months’ average basic pay | Market-linked | 50% of last 10 months’ average basic pay |
| Minimum service | 25 years | None | 20 years |
| Government share | 18.5% | 14% | Fully funded |
| Payout starts | Age 60 | As per withdrawal | Right after retirement |
| Equity limit | To be decided | Up to 50%, tapering | Not applicable |
Way forward
- A panel under former Finance Secretary T.V. Somanathan is studying better NPS benefits without returning to OPS.
Exam angle
- Government share 18.5%, employee 10%; minimum service 25 years.
- Panel head: T.V. Somanathan.