Operationalisation of Unified Pension Scheme under National Pension System Regulations, 2025: PFRDA Notification

Operationalisation of Unified Pension Scheme under National Pension System) Regulations, 2025

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY
NOTIFICATION
New Delhi, the 19th March ,2025

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY (OPERATIONALISATION OF UNIFIED PENSION SCHEME UNDER NATIONAL PENSION SYSTEM) REGULATIONS, 2025

F. No. PFRDA-12/01/0001/2023-LEGAL.—In exercise of the powers conferred by sub-section (1) of Section 52 read with clauses (f)and (w) of sub-section (2) thereof, of the Pension Fund Regulatory and Development Authority Act, 2013 (23 of 2013), the Pension Fund Regulatory and Development Authority hereby makes the following regulations to operationalise the Unified Pension Scheme(UPS) introduced by the Central Government as an option under the National Pension System (NPS) for the employees of the Central Government who are covered under NPS, namely:

CHAPTER I
PRELIMINARY

1. Short Title and Commencement. -(1) These regulations may be called the Pension Fund Regulatory and Development Authority (Operationalisation of Unified Pension Scheme under National Pension System) Regulations, 2025.

(2) The objective of these regulations is to lay down the framework to operationalise the UPS notified by the Central Government in the Ministry of Finance vide notification number F. No. FX-1/3/2024-PR, dated the 24th January 2025, and to define the obligations, roles and responsibilities of intermediaries and such Central Government offices as are involved with implementation thereof, and for matters connected therewith or incidental thereto.

(3) These regulations shall come into effect from 1st April 2025.

2. Definitions. – (1) In these regulations, unless the context otherwise requires,-

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CHAPTER II
APPLICABILITY

3. Applicability of Unified Pension Scheme. – (1) The option to avail benefits under UPS shall be available to the following category of persons–

(i) An existing Central Government employee in service as on 1st April 2025, who is covered under NPS, in terms of subsection (1) of section 20 of the Act;

(ii) A new recruit in the Central Government services, who joins service on or after the 1st day of April 2025;

(iii) (a)A Central Government employee who was covered under NPS and who has superannuated or voluntarily retired or has retired under Fundamental Rules 56(j) (which is not treated as penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965), on or before 31st March 2025; or

(b) the legally wedded spouse in case of a subscriber who has superannuated or retired and has demised prior to exercising the option for UPS.

(2) The exercise of option in respect of an eligible employee to be covered under UPS shall be undertaken: –

(i) within three months from 1st April 2025, or within such extended timelines if any, allowed by the Central Government, in respect of a person mentioned under clause (i) and clause(iii) of sub-regulation (1); and

(ii) within thirty days, from the date of joining Central Government services or within such extended timelines, if any, allowed by the Central Government, in respect of a person mentioned under sub-clause (ii) of sub-regulation (1)

(3) The option once exercised shall be final and irrevocable.

CHAPTER III
ENROLMENT

4. Exercise of Option and Enrolment under UPS. – (1) A person falling under regulation 3, shall exercise the option for being covered under UPS, before end of the option exercise period in the following manner –

(a) A Central Government employee in service as on 1st April 2025, who is subscribed to NPS shall submit an application to the concerned Drawing and Disbursing Officer (DDO) in Form A2 of Schedule I to enrol in UPS option under NPS in accordance with these regulations;

(b) In case of a new recruit to the Central Government services joining on or after 1stApril 2025, the existing process of enrolment under NPS shall continue. In case such new recruit chooses the UPS option under NPS, such person shall submit an application to the concerned DDO in Form A1 of Schedule I, to enrol in UPS option under NPS in accordance with these regulations;

(c) An eligible Central Government employee who has superannuated or retired under Fundamental Rules 56(j) (which is not treated as penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965), as may be applicable, on or before 31stMarch 2025, and was covered under NPS, shall submit an application in Form B2 of Schedule I along with KYC documents, to the concerned DDO, to avail the benefits under the UPS option, in the manner specified under these regulations;

(d) In case of a deceased Central Government employee who has superannuated or retired under Fundamental Rules 56(j) (which is not treated as penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965), as may be applicable, on or before 31stMarch 2025, and was covered under NPS and was eligible to avail benefits under UPS, the legally wedded spouse shall submit an application to the concerned DDO in Form B6 of Schedule I, along with KYC documents, to avail the benefits under the UPS option, when such benefits become due and payable in the manner specified under these regulations.

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CHAPTER IV
CONTRIBUTIONS

6. Individual Corpus. – (1) The monthly contribution of the UPS Subscriber shall be ten percent. of the basic pay (including non-practising allowance, where applicable) and dearness allowance thereon, which shall be credited to the individual PRAN of UPS Subscriber.

(2) The monthly contribution of the UPS Subscriber shall be matched by the Central Government by crediting an equal amount, to the individual PRAN of the UPS subscriber.

(3) The DDO shall deduct the contribution from the salary of the Central Government employee and send the bill to the PAO or Cheque Drawing and Disbursing Officer (CDDO) as the case maybe along with the details of contribution deducted in respect of each UPS Subscriber on or before the twentieth day of each month.

(4) The PAO or the CDDO as the case may be shall, based on the details of contributions in respect of each UPS Subscriber sent by DDO to PAO or CDDO, prepare and upload a Subscriber Contribution File (SCF) and generate transaction ID in the system of the CRA, on or before the twenty fifth day of each month.

(5) The PAO or the CDDO as the case may be, shall remit the employee contribution and matching co-contribution by the Central Government to the trustee bank through the accredited bank by the last working day of each month.

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CHAPTER V
INVESTMENT OF CONTRIBUTIONS

9. Investment Objective. -The contributions shall be invested and managed by the pension fund(s) with an objective to optimize returns on the investments, ensuring safety of contribution in the interest of UPS subscriber(s). The pension fund(s) shall take adequate steps and exercise prudence, diligence, and its technical expertise while undertaking fund management.

10. Investment of Pool Corpus. – (1) The Pool Corpus shall be allocated to such pension fund(s) as determined by the Central Government, who shall invest the funds in accordance with the investment pattern and related aspects thereto, as approved by the Central Government. The Authority shall, subject to such instructions, issue investment guidelines which the pension funds shall adhere to.

(2) The Pool Corpus shall be audited annually by an auditor to be appointed by the Authority.

Explanation: Auditor shall have the same meaning as mentioned under section 141of the Companies Act, 2013.

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CHAPTER VI
BENEFITS

13. Eligibility to receive Benefits. – (1) Subject to the conditions specified, UPS benefits shall be available only in the following cases:

(a)In case of an employee superannuating after qualifying service of ten years, from the date of superannuation.

(b)In case of Central Government retiring an employee under the provisions of Fundamental Rule 56 (j) (which is not a penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965) from the date of such retirement.

(c)In case of voluntary retirement after a minimum qualifying service period of twenty-five years, from the date such employee would have superannuated, if the service period had continued to superannuation.

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CHAPTER VII
PARTIAL WITHDRAWAL

18. Partial Withdrawal. -(1) UPS Subscriber shall be eligible to make partial withdrawals from the individual corpus under the UPS PRAN, after completion of lock-in period of three years from the date of enrolment under UPS or NPS whichever is earlier, up to a maximum of three times in total including the number of withdrawals, if any already made under NPS in terms of PFRDA (Exits and Withdrawals under National Pension System) Regulations, 2015, during the entire tenure under UPS.

(2) Such withdrawals shall not be made for more than twenty-five percent. of the own contributions (excluding accretion thereon) made by the UPS Subscriber, as on the date of application for withdrawal and subject to such conditions as specified under this regulation.

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CHAPTER VIII
PAYMENT OF BENEFITS

19. Payments under UPS. – (1) The payment of benefits to UPS Subscriber shall be in accordance with the UPS Notification, these regulations and guidelines, circulars, instructions or any directions issued by the Authority or the Central Government, as the case may be.

(2) The application for payment of benefits under UPS shall be made in the applicable Forms in Schedule I and submitted to the Head of Office or DDO:

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CHAPTER IX
ROLE OF INTERMEDIARIES AND OTHER ENTITIES

24. Intermediaries and Entities implementing UPS. – (1) UPS shall be implemented through NPS architecture, by such of the intermediaries registered with the Authority, namely National Pension System Trust, Pension Fund, Central Recordkeeping Agency, Trustee Bank and Custodian of Securities and the registration granted by the Authority under the Act and in terms of specific regulations shall enable such intermediaries to undertake activities under UPS, during the tenure of such registration. The nodal offices of the Central Government including Head of Office, PAO, DDO and CDDO shall also be part of the implementation process.

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CHAPTER X
FEES AND CHARGES

30. Fees and Charges. -The fees and charges for the services rendered by the intermediaries shall be in the mode and manner, and subject to such limits, as approved by the Authority. CRA shall be entitled to recover the charges in respect of services to UPS subscribers in the payout phase from Pool Corpus, within the limits approved by the Authority.

31. Regulatory Fees. -The intermediary shall be liable to pay to the Authority such fees and applicable taxes thereon for undertaking activities under these regulations, as determined by the Authority. In case of delay in payment of fee, the intermediary shall be liable for payment of simple interest at rates determined by the Authority or any late fee alongwith applicable taxes thereon.

CHAPTER XI
ACTION IN CASE OF DEFAULT BY INTERMEDIARIES

32. Action in case of Default.- (1) In case of any act of omission or commission by an intermediary which prima-facie entails violation of the provisions of the Act, or the rules or this regulation or any other regulations or instructions, directions or notifications issued either by the Central Government or the Authority, in relation to the provision of UPS, or is considered to be prejudicial to the interest of subscribers under UPS, such intermediary shall be liable to be proceeded against in terms of the provisions of the Act, these regulations and such other specific regulations applicable to the said intermediary, under which it has been granted registration by the Authority.

(2) The provisions of the specific regulations applicable to the said intermediary, dealing with suspension or cancellation of certificate of registration and action in case of default shall apply mutatis mutandis in respect of proceedings referred to in sub-regulation (1).

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CHAPTER XII
INSPECTION AND AUDIT

33. Inspection and Audit. – (1) The inspection and audit of any intermediary, in relation to activities performed under these regulations, shall be in accordance with the provisions of the specific regulations, applicable to the said intermediary, under which it has been granted registration by the Authority. The relevant provisions pertaining to inspection and audit, shall apply mutatis mutandis in such a case.

(2) Without prejudice to provisions of sub-regulation (1), the Central Government or the Authority, may cause any special inspection or audit to be done, in relation to the activities of any intermediary under these regulations or any other entity involved with implementation of UPS, for securing orderly conduct and implementation of UPS or in the interest of subscribers under UPS. The Authority may devise any suitable mechanism for conduct of such special inspection or audit.

CHAPTER XIII
MISCELLANEOUS

34. Redressal of Subscriber Grievances. – The grievances of the subscriber shall be redressed in accordance with the provisions of the Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievance) Regulations, 2015, and the intermediary shall have suitable mechanism for redressal of grievance of subscribers in accordance with the provisions of the said regulations.

35. Confidentiality. – The intermediary shall maintain absolute confidentiality with respect to all records, data and information received or acquired by it during the course of its working. The intermediary shall ensure updated cyber security measures and prevent breach of data, at all times. It shall not, without the prior permission of the Authority, produce or share such data or information as evidence, or for any other purpose, except as required by the due process of law.

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Schedule I
[See Regulation 4, 19, 20 and 23]

Summary of Forms contained in Schedule I

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SCHEDULE II
[See Regulation 12]

Weighted Average NAV (Default Pattern)

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SCHEDULE III
[see Regulation 12]

Illustrative examples of computation of Benchmark Corpus

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Schedule IV
[See Regulation 13]

Illustration for computation of qualifying service for purpose of UPS benefits

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SCHEDULE V
[See regulation 15(1)(iv)]

Illustrative examples of working of Admissible Payout under different scenarios

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SCHEDULE VI
[See Regulation 22]

Representative Annuity Rates (RAR) for the period Jan 2014 to March 2025

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SCHEDULE VII
[see Regulation 22]

Illustration for Retirees on or before 31.03.2025

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