mOST We spent years working hard, but when it comes to life planning after retirement, we tend to ignore it – until it starts to feel a little real. For good reason, India’s pension schemes have received more attention. As life expectancy and cost increase increases, many are rethinking their financial management strategies. The government has proposed several pension schemes in India that provide structured solutions to help citizens save money for the future.
National pension plans or National Pension System (NPS) and unified pension plans (UPS) are the most common options. Although both belong to the broader protection of government-supported pension schemes, they work differently and are often mixed together. Understanding the major differences between NP and UPS can greatly impact how your retirement fund is shaped.
In this article, let us discuss applicant’s qualification requirements and benefits in more detail.
What is the National Pension Plan (NPS)?
The National Pension Plan is a retirement-focused investment plan launched by the government in 2004. The plan is a plan as a new central government employee (except the armed forces), but by 2009 it has been voluntarily open to every citizen. Pension Fund Regulatory Authority (PFRDA) regulates it under the PFRDA Act of 2013.
When you sign up, you will get a permanent retirement account (PRAN) that will stay in touch with you even if you change your job or location. NP offers two types of accounts:
- Level 1: This is strictly for retirement savings and has restrictions on evacuation.
- Level 2: This is more flexible, you can withdraw the amount at any time, but it does not provide any tax advantages.
Some clear benefits? It is portable across jobs and states, easy to track and low cost. With regular monitoring, transparent investment specifications and performance reviews of NPS Trust, you will be able to track the value of your investment effectively.
As of March 31, 2025, Total subscriber base For India’s national pension scheme, applicants from central and state governments and even corporate departments have reached nearly 20 million (about 19.8 billion).
Understand a unified pension plan (UPS)
The unified pension plan is Latest retirement plan Launched by the central government and effective on April 1, 2025. It targets central and state government employees and will serve as a replacement for existing NPs. Main goal? Bringing more clarity, predictability and long-term financial support to approximately 2.3 million government workers. UPS is trying to simplify pension plans in India and address retired employees’ requirements in a safer income model.
Central and state government employees covered by NPS are eligible for the program. They can choose to switch from NPS, but this decision is irreversible. The spouse of a deceased NPS subscriber who died before choosing UPS can also register. However, if you quit before completing a decade of government services by April 2025, you will not be eligible for the program.
But why is UPS so important? It promises to have a fixed pension, a minimum monthly pension of Rs 10,000, family pension and relief allowance – all government support. While this is reassuring, switching from NPS to UPS also means choosing between guaranteed stability and flexible returns.
Comparison of NP and UPS
Here are insights into NP and UPS and their details:
| feature |
National Pension Plan (NPS) |
Unified Pension Plan (UPS) |
| Qualification criteria |
Open to all Indian citizens aged 18 to 60, including government and company employees |
Central and state government employees, including recruits and service personnel starting April 1, 2025 |
| Pension amount |
Depend on market performance and amount of NPS investment |
50% of the average basic salary (last 12 months) for those who have served for more than 25 years |
| tip |
NPS is not available |
One-time payment provided |
| Tax benefits |
60% of the evacuation amount is tax-free, 40% of the purchase of taxable annuity under a specific section |
Request for formal clarification |
| Employer contribution rate |
14% Basic wages for employees |
18.5% Basic salary for employees + dear allowance (DA) |
| Related risks |
Market-related funds – Returns vary by fund performance |
Low Risk – Provides guaranteed pension benefits |
How do you apply for these pension plans in India?
Applying for NP and UPS is a very simple process:
- To apply for a national pension plan, please visit the official website of ENP: https://enps.nsdl.com/enps/nationalpensionsystem.html. Click Register Now to select the category that applies to you. You need a PAN, a mobile phone number linked to Aadhaar, date of birth, and a valid email ID for the initial registration. After registration, a permanent retirement account (PRAN) will be issued.
- For a unified pension plan, if you migrate from NP, you can fill out the A1 or A2 form for A1. In addition to the application form, you must submit relevant documents such as identity and address proof, PAN and date of birth. All necessary forms and detailed instructions can be downloaded from the official portal: https://www.npscra.nsdl.co.in/ups.php. You can also apply for new registration and migration from NPS through the ENPS portal.
- These pension schemes in India – NPS and UPS represent a growing digital finance ecosystem and secure financial plans. If you want long-term financial benefits after retirement, it is best to start planning as early as possible.
