The Department of Expenditure (DoE) under the Ministry of Finance is set to release an operational framework for the upcoming Unified Pension Scheme (UPS), according to a Business Standard report. It will detail how the scheme will be implemented, including provisions for individuals who retired under the National Pension System (NPS) and made partial withdrawals of their annuity amount. The UPS, which received Union Cabinet approval on Saturday, is slated to be implemented from April 1, 2025.

A senior finance ministry official confirmed to BS that the DoE will finalise the operational modalities and mechanisms by March 31, 2025, and will make the framework available as soon as possible. The framework will include guidelines for transferring NPS corpus amounts to the new unified scheme, considering various scenarios such as partial withdrawals and contributions made since retirement.

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In the coming week, the DoE plans to hold meetings with state government representatives to discuss the specifics of the new scheme, BS reported. The Pension Fund Regulatory and Development Authority (PFRDA) has scheduled a press conference for Tuesday in New Delhi to provide further details on the UPS.

The official noted that the framework aims to include individuals who retired under the NPS, detailing the process for calculating total corpus amounts based on retirement years, contributions, and any withdrawals made.

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Each state government will need to assess its fiscal liability for adopting the UPS, as the profile and number of employees vary. An estimated 2.3 million individuals within the central government are enrolled with the NPS now.

States wishing to implement the scheme next year will need to allocate funds in their upcoming budgets, based on the number of NPS subscribers among their employees. The framework will also address payout scenarios for individuals who opt for voluntary retirement before the 25-year mark, with pensions set to commence on the actual retirement date if the individual continues in government service.