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In a landmark decision, the Indian government has announced that all central government employees enrolled under the Unified Pension Scheme (UPS) will now be eligible for retirement and death gratuity benefits—just like they would have been under the Old Pension Scheme (OPS). This move brings long-awaited relief and parity for thousands of government employees and signifies a major policy shift in the country’s pension framework.

✅ Key Announcement by Union Minister Jitendra Singh

Union Minister Dr. Jitendra Singh confirmed the development on Wednesday during a press briefing focused on governance reforms over the past decade. He emphasized that this step addresses a longstanding demand from a large section of government workers and ensures equity in retirement benefits between employees covered under the National Pension System (NPS) and those under OPS.

According to the minister, the provision aims to extend a stronger social security safety net to all categories of central employees under NPS by offering them access to retirement and death gratuity—benefits previously exclusive to OPS enrollees.

🔍 What's Changing Under the Unified Pension Scheme?

Under the new guidelines, employees covered by UPS will now be eligible for gratuity benefits as per the Central Civil Services (Payment of Gratuity under NPS) Rules, 2021. This includes:

• Retirement Gratuity upon superannuation

• Death Gratuity in the unfortunate event of an employee’s demise during service

• Gratuity eligibility in cases of permanent disability or dismissal due to disability

These provisions ensure that NPS-covered employees enjoy the same protections and financial support as those under OPS, thereby removing long-standing disparities between the two pension systems.

📜 Progressive Provisions Introduced

The Department of Pension and Pensioners’ Welfare (DoPPW) released an official order detailing the eligibility and process for UPS-covered employees to access these gratuity benefits. Importantly, the order provides flexibility for employees or their families to opt back into OPS benefits in case of premature death or severe disability during service.

V. Srinivas, Secretary, DoPPW, described the directive as a progressive step that answers repeated clarifications sought by employees and unions alike. It allows next-of-kin to claim OPS-based gratuity benefits in specific cases even if the employee was under the NPS at the time of death.

🎯 Employees’ Union Welcomes the Move

The announcement has been warmly received by employee bodies. Manjeet Singh Patel, President of the All India NPS Employees Federation, called it a “historic and much-needed step” that resolves widespread confusion around gratuity entitlements under UPS.

Patel noted that the inclusion of retirement and death gratuity in UPS will likely encourage more government employees to opt for the scheme once it becomes a formal choice.

📅 Implementation Timeline and Eligibility

In a prior notification issued on January 24, 2025, the Finance Ministry declared that employees joining the civil services from April 1, 2025, onward would have the option to choose between the NPS and UPS. The gratuity benefits will be applicable as per the latest UPS-related provisions.

In a subsequent clarification issued this week, the government confirmed that the maximum gratuity cap under UPS would also be ₹25 lakh, in line with current OPS and NPS gratuity rules. This establishes parity between all three pension structures.

📌 Final Takeaway

The introduction of retirement and death gratuity benefits under the Unified Pension Scheme marks a major shift in India's approach to public sector pensions. It reflects the government’s intention to provide greater financial security and fairness for its workforce, particularly during retirement or in unforeseen circumstances.

This move is expected to bring clarity, encourage employee trust, and close the gap between various pension schemes. Central government employees are advised to stay informed about further procedural updates and consult their departments for clarity on benefit claims.