Central government employees who are part of the Unified Pension Scheme (UPS) will now be entitled to retirement and death gratuity benefits, as per a recent announcement by Union Minister Jitendra Singh on Wednesday, June 18, 2025. This move aims to address a long-standing demand from a significant portion of government employees, ensuring parity in retirement benefits.
Dr. Singh, the Minister of State for Personnel, emphasized the government's commitment to providing social security for all employees under the National Pension System (NPS). The new provision aligns with the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.
The Department of Pension and Pensioners' Welfare (DoPPW), operating under the Personnel Ministry, has issued an order providing options to avail benefits under the Old Pension Scheme (OPS) in the event of a government servant's death during service or discharge due to invalidation or disability, for those covered under the Unified Pension Scheme. This order allows employees to revert to the OPS in case of death during service, a move described by DoPPW Secretary V Srinivas as progressive and responsive to employees' concerns.
Manjeet Singh Patel, President of the All India NPS Employees Federation, welcomed the order, calling it a historic and much-needed step by the government. The inclusion of death-cum-retirement gratuity in the UPS is expected to provide substantial relief and security to employees and their families.
The Unified Pension Scheme (UPS) was introduced to provide additional benefits to eligible NPS retirees. Individuals who retired on or before March 31, 2025, and have completed at least 10 years of qualifying service can now avail of these additional benefits. In cases where the subscriber is deceased, their legally wedded spouse is eligible to claim these benefits. The UPS offers enhancements over the existing NPS payouts, making it an attractive option for retirees seeking financial security.
The key benefits of the Unified Pension Scheme include a one-time lump sum payment, a monthly pension top-up, and interest on any arrears. Retirees will receive a lump sum equal to one-tenth of their last drawn basic pay plus dearness allowance for every completed six months of qualifying service. This scheme encompasses various retirement circumstances, including superannuation, voluntary retirement, and retirement under FR 56(j).
Dr. Jitendra Singh also highlighted broader governance transformations, including the repeal of over 1,600 outdated rules, digitalization of pension services, and enhanced transparency in recruitment processes. He noted that governance reforms should prioritize citizen trust and administrative efficiency, marking a shift towards a more inclusive and responsive framework. Additional reforms in pension administration were outlined, such as digital life certificates for pensioners, revised family pension provisions, and capacity-building initiatives under Mission Karmayogi. The government aims to streamline pension disbursement, boost employee morale, and ensure fairness in benefit allocation.
Experts see this move as a key step toward reinforcing financial security for retired employees. The revised pension framework is expected to positively impact thousands of government staff, ensuring equitable treatment in retirement compensation. This policy is one among several governance initiatives introduced in recent years to enhance employee welfare and institutional transparency. The government remains committed to fostering a balanced retirement ecosystem for public sector employees, reflecting its evolving approach to workforce policies.
