Unified Pension Scheme: Revised Guidelines on Pension Forfeiture for Resigned Employees

Context:

• The Department of Pension and Pensioners’ Welfare (DoPPW) has issued a clarification on October 29, 2025 , regarding the entitlement of central government employees under the Unified Pension Scheme (UPS) in cases of resignation. The update provides detailed guidance on how resignation affects the assured payout and pension corpus under the new scheme, which came into effect from April 1, 2025 .

Key Clarification on Resignation

As per the revised rules, employees who resign from service under the UPS will forfeit their right to the assured pension payout . This means that upon resignation, the employee loses the guaranteed post-retirement benefits.
However, the accumulated pension wealth (corpus) —including employee and government contributions—will still be paid as a lump sum after necessary verification. The provision is in line with existing National Pension System (NPS) guidelines.

Timeline for Corpus Disbursement

The DoPPW has specified that the lump sum corpus will be released 90 days after the effective date of resignation to allow administrative checks.

• If the employee dies within 90 days , the pension corpus is transferred to the spouse or legal heir .

• The process ensures transparency and compliance with pension authority norms .

Switching Between UPS and NPS

Employees under UPS may opt once to switch back to NPS , but this option is available only:

• Within 12 months before retirement ,

• 3 months before voluntary retirement , or

• At the time of resignation or compulsory retirement (under Fundamental Rule 56(j)).
  Switching to NPS provides a 14% employer contribution but results in loss of UPS’s assured benefits .

Exam-Oriented Facts

• Unified Pension Scheme effective: April 1, 2025

• Issued by: Department of Pension & Pensioners’ Welfare (DoPPW)

• Clarification date: October 29, 2025

• Resignation effect: Forfeiture of assured payout, retention of corpus

• Corpus payment: After 90 days from resignation

• Switching to NPS: Allowed once under specified conditions