Pensions: NPS & UPS

Central Government employees who joined before 1 January 2004 were covered by a defined-benefit pension under the CCS (Pension) Rules, 1972, paid by the Government. From that date new entrants moved to the National Pension System, a defined-contribution scheme to which both employees and the Government contribute, and most State Governments later adopted it for new recruits. NPS was opened to every citizen on a voluntary basis from 1 May 2009. The Atal Pension Yojana, launched on 9 May 2015 for people aged 18 to 40, offers a guaranteed pension of ₹1,000 to ₹5,000 a month from the age of 60.

The Union Cabinet approved the Unified Pension Scheme (UPS) on 24 August 2024; the Department of Financial Services notified it on 24 January 2025 as an option under NPS, and it took effect on 1 April 2025. It assures 50% of the average basic pay of the last 12 months for employees with 25 years of qualifying service, proportionately less for shorter service down to 10 years, a minimum pension of ₹10,000 a month after 10 years, family pension at 60% of the pension, and dearness relief linked to the Consumer Price Index for Industrial Workers. The Government contributes 10% of basic pay and dearness allowance plus 8.5% to a pool corpus, against a 14% direct contribution under NPS. Rules notified in September 2025 let an employee switch from UPS back to NPS up to one year before retirement.

An NPS subscriber has an individual pension account invested across government securities, corporate bonds and equities, with a Tier I retirement account and an optional Tier II savings account; under the Balanced Life Cycle Fund introduced in 2024, subscribers can keep 50% in equities until the age of 45. NPS Vatsalya, launched on 18 September 2024, lets parents or guardians open an account for a minor that becomes a regular NPS account at majority, and had 1.08 lakh subscribers by 31 March 2025. The Multiple Scheme Framework, in effect from 1 October 2025, lets pension funds offer schemes for groups such as professionals, corporate employees, women and platform workers. Amendments of 19 December 2025 let non-government subscribers take up to 80% of their corpus as a lump sum at normal exit, up from 60%, and raised the maximum entry and exit age to 85.

NPS and APY together passed 9 crore subscribers and ₹16 lakh crore in assets on 9 October 2025, and APY recorded more than 1.35 crore gross enrolments in 2025-26, the most in any year since it began. On 21 January 2026 the Cabinet approved continuing APY up to 2030-31, with funding for outreach and gap funding. PFRDA has approved in principle a framework for scheduled commercial banks to set up pension funds, revised investment management fees for pension funds from 1 April 2026, and in 2025 consulted on new NPS payout schemes, including ones with an assured pension. The Code on Social Security, 2020 contains enabling provisions to extend pension-linked benefits to gig and platform workers.

₹7.37 lakh crore → ₹14.43 lakh crore NPS and APY assets (31 March 2022 → 31 March 2025). ₹15.95 lakh crore NPS and ₹51.4 thousand crore APY assets (31 March 2026). 2.17 crore NPS subscribers (31 March 2026). 9,29,47,723 APY gross enrolments (30 June 2026). 1.08 lakh NPS Vatsalya subscribers (31 March 2025). ₹10,000 minimum monthly pension under UPS after 10 years' service. Sources: PFRDA Annual Report 2024-25; PIB backgrounder (7 May 2026); PIB PRIDs 1905533, 1954021, 2048607, 2123577, 2163608, 2174235, 2177002, 2206763, 2210396, 2216718, 2254487; Lok Sabha Unstarred Question 1314 (27 July 2026).