CPI(M) MP urges finance minister to extend deadline for govt staff to join Unified Pension Scheme

New Delhi | Communist Party of India (Marxist) MP John Brittas on Wednesday wrote to Finance Minister Nirmala Sitharaman, urging her to extend the deadline for government employees to join the Unified Pension Scheme (UPS), and said there are ambiguities that need to be clarified.

In a letter addressed to the finance minister, Brittas said there are certain "pressing concerns" and "ambiguities" in the UP that have been flagged by the Confederation of Central Government Employees & Workers, particularly in view of the June 30, 2025 deadline set for exercising the option of joining the scheme.

He said while the UPS is being positioned as a replacement for the National Pension System, a number of "legitimate and fundamental questions" raised by stakeholders remain unanswered, making it extremely difficult for employees to make an informed and confident decision.

"These unresolved issues span across areas such as death benefits, retirement, disability, voluntary retirement, taxation, procedural flexibility, etc. - all of which are central to the financial security of employees and their families," Brittas said.

The CPI(M) MP said there is no clarity on what entitlements would accrue to the spouse of a government employee who dies in service under UPS.

"It is unclear whether the individual corpus would be returned to the spouse, as is the practice under NPS, or whether family pension would be payable as per the CCS (Pension) Rules," he said.

He said similarly, in cases where death or disability is attributable to official duty, there is no indication whether the family/subscriber would be eligible for benefits under the CCS (EOP) Rules.

The scheme also does not clarify whether a divorced spouse can nominate his or her dependent children or about nominating children with disabilities such as autism, as beneficiaries. He added that it remains equally vague whether disability pension will be applicable under UPS in cases of service related incapacitation.

"Likewise, in the case of voluntary retirement, if an employee passes away in the intervening period between the date of voluntary retirement and the actual date of superannuation, there is no clarity on whether benefits will be extended and how the intervening period, currently with no pension cover, will be treated," he said.

He further said for employees who superannuated before 31st March 2025, it is unclear whether they would be permitted to recoup their 60 per cent NPS withdrawal made at the time of retirement and switch to UPS to claim the admissible assured payout at 50 per cent.

The tax implications of the UPS is not clear for an employee who is subsequently dismissed or removed from service. Also, there is no clarity on whether they would be permitted to receive the benefits against the contributions already made to the pension fund under NPS or UPS, Brittas added.

"In light of the above, it would be procedurally unfair and premature to impose a final deadline of 30th June 2025 for exercising the option by the existing employees," he said.

"I most earnestly urge your good self to consider extending the deadline for existing employees to exercise their option to join UPS by at least another three months. Further, it is also requested that newly joining employees may also be given a minimum period of three months, instead of the present 30-day window from the date of joining, to exercise their option under UPS, in order to ensure parity, clarity, and informed choice at the point of entry into service," he said.

The finance ministry in January notified the Unified Pension Scheme (UPS), which promises an assured pension of 50 per cent of the average basic pay drawn over the last 12 months prior to superannuation.

The UPS would be applicable to central government employees who are covered under the National Pension System and who choose the option.