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More than 1.18 lakh central government employees had opted for the Unified Pension Scheme by mid-July 2026.
Those opting in include new recruits, serving staff and former retirees.
The Unified Pension Scheme is available as an option under the National Pension System for central government employees.
It was introduced to address demands for assured pension benefits under the NPS framework.
[["Type","Defined benefit","Defined contribution","Assured payout within a contributory framework"],["Employee contribution","None","Required","Required"],["Payout certainty","Assured, linked to last drawn pay","Depends on market returns on the accumulated corpus","Assured, subject to prescribed conditions"],["Fiscal character","Unfunded liability on the exchequer","Funded through contributions","Funded, with the government bearing the assurance"]]
["Aspect","Old Pension Scheme","National Pension System","Unified Pension Scheme"]
In a defined benefit pension, the employer promises a specified payout, usually linked to final salary, and bears whatever it costs to deliver it. The employee carries no investment risk; the exchequer carries all of it, and the liability is open-ended because it depends on how long pensioners live. In a defined contribution system, the employer's obligation ends with the contribution, the money is invested, and the eventual pension depends on market returns — so the risk sits entirely with the employee. The move to assured payouts within a contributory structure is an attempt to place that risk somewhere between the two.
Simple Analogy: Defined benefit is a fixed salary the employer must find the money for; defined contribution is a share of profits that varies with how the business does.
General Awareness > Financial Schemes and Pensions
General Awareness > Government Schemes
GS Paper 3 > Government Budgeting and Fiscal Policy
Who among the following can join the National Pension System (NPS)?
Answer: All State Government employees joining the services after the date of notification by the respective State Governments
An option under the National Pension System for central government employees providing an assured payout.
The contributory, defined-contribution pension framework for government employees and others, regulated by PFRDA.
A pension promising a specified payout, with the employer bearing the investment and longevity risk.
A pension where only the contribution is fixed and the payout depends on investment returns.
The Pension Fund Regulatory and Development Authority, the statutory regulator of the pension sector.