UPS vs NPS calculation: Still undecided? Here are numbers to help you decide correctly before new deadline of September 30, 2025

Time of India

5 days ago

UPS Calculator: NPS VS UPS calculations
Date of birth of employee: January 1, 1980
Date of joining of employee: January 1, 2005
Retirement age: 60 years
Qualifying service: 35 years
Current monthly basic pay: Rs 35,000
Existing Tier I NPS corpus today: Rs 12 lakh
Annual Basic Pay growth: 2%
Annual Dearness Allowance Growth: 6%
Expectation of return on investment: 10%
Final Withdrawal%: 60%
Annuity rate: 6%
Life expectancy: 90 years
Spouse life expectancy: 90 years
UPS vs NPS
UPS
NPS
UPS admissible payout (monthly)
Rs 23,388 + DR
Rs 25,070
Lumpsum payout
Rs 10,58,643
NA
Final withdrawal payout at Superannuation
Rs 67,50,640
Rs 75,20,989
Total monthly payouts to retiree in retirement phase (In UPS)
Rs 1,81,86,820
Rs 90,25,187
Pros and Cons of UPS for Central Government Employees
Benefits under UPS
Cons of UPS for Central Government Employees
Pros and Cons of NPS for Central Government employees
Pros under NPS for Central Government employees
Cons under NPS for government employees
The last date to apply for pension under the Unified Pension Scheme (UPS) is September 30, 2025. This cutoff is for central government employees who are still working and are covered under the National Pension System (NPS), along with those government employees who retired on or before March 31, 2025, provided they meet specific conditions.However, there are still some central government employees who are yet to decide whether UPS is better than NPS. This decision is significant, as this switch can be exercised only once in the lifetime of a central government employee and cannot be reversed. ET Wealth online has done some number crunching to help you decide the better options.We have used the UPS calculator released by the PFRDA. To make the calculations, we have made certain assumptions, which are as follows:According to the UPS calculator, the payout after retirement will be as follows:Source: PFRDA UPS calculatorAccording to the table above, the monthly payout is initially higher for the NPS. However, as the dearness relief is hiked by the government, the payout for the UPS retirees will also increase.Source: UPS Pension CalculatorApart from numbers, the central government employees should also know the pros and cons of the pension scheme under UPS to decide.1. UPS aims to provide guaranteed pension payouts after retirement. According to the pension scheme rules, a central government employee will receive 50% of their average pay for the last 12 months as pension, provided they have worked for 25 years or more.2. A pension of Rs 10,000 per month is payable after a minimum service of 10 years. If the service years are between 10 years and 25 years, then the pension payout will be proportional to the years of service.3. Pension under UPS will be indexed to inflation, via dearness relief.4. There is a higher government contribution to UPS as compared to NPS. Under the UPS, the government contributes 18.5% in total, where 10% goes to the employee's account and 8.5% goes to a separate pooled fund.5. UPS provides a one-time lump sum payment equal to one-tenth of the last drawn basic salary plus dearness allowance, for each completed six months of qualifying service. Along with this lump sum, an employee will also be eligible for gratuity.1. Even though UPS has a higher government contribution, only 10% is deposited into the employee's pension account. The additional 8.5% is deposited into the pool corpus, which is made to enhance the stability and sustainability of the entire pension scheme. This portion will not be paid to the subscriber on maturity.2. A central government employee may need to fund the deficit to be eligible for the 50% assured payout if the UPS benchmark corpus falls short. Benchmark corpus is a notional value that acts a reference point for evaluating whether the government employee's total accumulated corpus at the time of retirement is sufficient. It is important to note that surplus money will be refunded if it exceeds the benchmark corpus.3. The government employee may not gain better pension if the qualifying service is less than 25 years but more than 10 years. Also, any service period beyond 25 years is effectively ignored for payout benefits.4. In UPS, a retiree can receive the payout benefits only after reaching the superannuation age. If voluntarily retired, he/she must wait till superannuation age to get the benefits.5. Legal heirs of a central government employee will not get full benefits in UPS. In case of early demise, spouse will get 60% of guaranteed sum.1. The government's contribution of 14% of employees' basic pay is directly deposited to the pension account along with 10% individual's contribution.2. NPS allows a greater degree of choice, control, and flexibility in investments and withdrawals. UPS subscribers can choose from three pension fund managers whereas NPS subscribers are allowed to choose from ten pension fund managers.3. NPS allows government employees to invest for longer period and defer withdrawals. Both lump sum withdrawals and annuity payouts can be deferred under the NPS.4. Central government employees can do systematic withdrawals from the accumulated corpus instead of taking a lump-sum payout.5. Even though both UPS and NPS allow withdrawal of 60% of the total corpus on superannuation. However, there is no clarity on whether a UPS lump-sum withdrawal is also exempt as an NPS withdrawal.6. A central government employee can claim a deduction on the employer's contribution to the NPS account under both the tax regimes (old and new). No such deduction is offered on the employer's UPS contribution.1. Under NPS, there is no assured pension payout. The pension is dependent on the accumulated corpus, the percentage of corpus used for annuity and the prevailing annuity rates.2. There is no inflation adjustment of the pension under the NPS.3. No additional lump sum is provided to the subscriber beyond the accumulated retirement corpus.