A new employee, joined central government service on 01.01.2012, Date of retirement: 31.12.2046, 60y

Amount accumulated in NPS as on today: 3L (Rs 3,00,000/-) (as on 31.03.2025)

UPS starts from 01.04.2025. The employee have option to continue with NPS or switch to UPS.

Assumption as on 22th April 2025

1. An employee with current Basic Pay Rs 10,000/-

2. DA: 53%

3. Annual increment in January: 3%

4. Increase in DA/year in January: 7%

5. Pay commission in 2026 and every 10 years.

6. Special increase in DA due to pay commission: 0%.

7. Length of service: 35 years (Retirement at age 60),

(Service completed 01.01.2012-31.03.2025: 13y 3m, 13.25y),

service remaining 31.03.2025 - 31.12.2046: 21y 9m: 21.75y

8. Withdrawal at age 60: 60% of Individual corpus (Employee + Employer's contribution combined)

9. Annuity plan's return: 7%.

10. No change in basic pay apart from annual increment. No promotion considered.

Let us calculate between NPS and UPS, which is beneficial for him/her

NPS

Employee Contribution (%): 10%
Employer Contribution (%): 14%
Individual corpus (as on 31.03.2025): 3L
Individual corpus* (31.12.2046, Age 60): (value of 3L at age 60 + Accumulation now onwards till age 60) = Rs 32,41,154 + Rs 79,02,805 = Rs 1,11,43,959/- (Rs 1.11Cr)
Withdrawal 60% at retirement of *: Rs 66,86,375/- (Rs 66.9 L)
Pension Corpus of *: Rs44,57,584/- (Rs 44.6L)
Pension per Month: Rs 26,003/- (Rs 26k) (Fixed, Not linked to DA/DR)

UPS

Employee Contribution (%): 10%
Employer Contribution (%): 10%
Individual corpus* (as on 31.03.2025): 3L
Individual corpus** (31.12.2046, Age 60): (value of 3L at age 60 + Accumulation now onward till age 60) = Rs 32,41,154 + 65,85,671/- = Rs 98,26,825/- (Rs 98.3L) (c.f. Rs 1.11 Cr in NPS, due to extra 4% Govt contribution)
Basic Pay at retirement (2046, Age 60): Rs86,020/-
DR at retirement (2046, Age 60): 7% (31.12.2046)

Withdrawal 60%

Lump Sum Amount (Service Benefit): Rs 6,44,290/- (Rs 6.44L)
Withdrawal 60% at retirement of **: Rs 58,96,095/- (Rs 59L)
Pension per Month: Rs 18,408/- with 7% DR (Rs 17,204/- + DR)

Withdrawal 0%

Lump Sum Amount (Service Benefit): Rs 6,44,290/- (Rs 6.44L)
Withdrawal 0% at retirement of **: ₹0/- (Rs 0)
Pension per Month: 46,021/- with 7% DR (Rs 43,010/- + DR)

NPS vs UPS

Pension amount to be received: NPS after 60% withdrawal vs UPS after 60% withdrawal at retirement at age 60 (2046)

NPS: Rs 26k (Fixed)

UPS: Rs 18.4k/- (Rs 17.2k/- + DR)