What will happen to NPS, Corpus, Fund, Contribution after UPS?

Before shifting from NPS to UPS, it is important to know about NPS and UPS in detail. Here we will know what will happen to NPS, NPS corpus, NPS fund, NPS contribution after UPS? And we will know who is best between UPS and NPS?

What is NPS?

NPS is a pension scheme implemented from 1 April 2004 which was passed by the Central Government. This scheme is for all central and state employees except army, if they wish, private companies can also give the benefit of this scheme to their employees.

Under NPS, the employee has to deposit 10% of his basic pay in the NPS fund and the government or companies contribute 14% on their behalf.

After retirement, employees can withdraw 60% of the amount from their NPS fund and the remaining 40% can be invested in any NPS fund manager for pension. Your pension depends on the market. NPS does not guarantee you a fixed pension, or a guaranteed family pension. Under this you do not get any gratuity.

What is UPS?

Unified pension scheme launched by the Central Government on 24 August. It will be effective from 1 April 2025. UPS was forced to bring in NPS because of widespread dissatisfaction among employees. This pension is a combined form of NPS and OPS.

In UPS also, the employee has to deposit 10% of his basic pay in the fund and the government deposits 18.5%. After retirement, employees get guaranteed fixed pension and fixed family pension. After retirement you are given lump sum and gratuity. This payment does not affect your pension.

Pension

Under the Unified Pension Scheme, 50% of your average basic salary of the last 12 months is given as pension and DR increment is taken twice a year. After the death of a pensioner, 60% of his pension is given to his wife/husband as family pension.

NPS vs UPS

Particulars	UPS	NPS
Pension Guarantee	Minimum 50% guarantee on 25 years of employment	No guarantee
Minimum Pension Guarantee	Guarantee of minimum pension of Rs 10000 on completion of 10 years of service.	No guarantee
Employee Contribution	10%	10%
Government Contribution	18.5%	14%
Family Pension	60% of last pension	No pension
Gratuity	This will be based on 15 days’ salary every year.	No Gratuity
Lump Sum	10% of salary every 6 months	No lump sum (although 60% of NPS can be withdrawn on retirement.)
Dearness Relief	Yes	No
VRS Facility	Yes	No

What will Happen to NPS After UPS?

Let us tell you that UPS will be implemented from April 1, 2025 and the government has not given any clear details about NPS whether it will remain operational or closed. But experts believe that after the implementation of UPS, the NPS pension scheme will be discontinued, although the existing employees taking the benefit of NPS can continue to avail its benefits or convert to UPS if they wish.

What will Happen to NPS Corpus After UPS?

After the launch of the Unified Pension Scheme (UPS), the question that arises in people’s minds is what will happen to the NPS, corpus, funds, and contributions. Let us tell you that under NPS, the employee has to deposit 10% of his basic pay in the pension fund and the company contributes 14% to the pension fund.

If you continue with NPS, you will get 60% of the NPS corpus as lump sum on retirement. 60% of the NPS corpus is tax free and 40% is taxable.

If you shift from NPS to UPS, 10% of the service every six months is paid as Lump Sum.

What will Happen to NPS Contribution After UPS?

As I have already told, an employee under NPS has to deposit 10% of his basic pay in the pension fund and the government contributes 14% on its behalf. If you remain with NPS then all the old policies of NPS will be applicable. If you shift to the Unified Pension Scheme, you will be given lump sum payment, gratuity, and fixed pension.

How to Switch from NPS to UPS?

UPS portal has not been launched yet, it is likely to be launched by 2025, till then the exact process of switching from NPS to UPS cannot be told. The government should keep the process of switching from NPS to UPS simple. To switch from NPS to UPS, all the details of NPS will be required.