UPS vs OPS vs NPS: Key Differences Explained by Minister of State for Finance | India's New Unified Pension Scheme 2025

Government of India

Ministry of Finance

Department of Financial Services

Also read :New Pension System – Tier II is important part of system, don’t ignore it

Rajya Sabha Unstarred Question No. 3440

Answered on Tuesday, 01 April 2025 / 11 Chaitra, 1947 (Saka)

Subject: Difference of UPS from OPS and NPS

Also read :Continuing Contribution beyond age of superannuation - Till 70 years

Question by: Shri Parimal Nathwani

Query:

(a) Details of how the new Unified Pension Scheme (UPS) differs from the Old Pension Scheme (OPS) and/or the National Pension Scheme (NPS).

(b) State Governments that have shown interest in implementing UPS.

(c) Whether the Central Government plans additional financial support for States adopting UPS.

Answer by:

Minister of State for Finance (Shri Pankaj Chaudhary)

(a) Key Differences Between UPS, OPS, and NPS:

Unified Pension Scheme (UPS):

• Notified on 24.01.2025 as an option under NPS.
• Hybrid Model: Defined contribution scheme with assured monthly payouts (elements of defined benefit).
• Funded by employee + employer contributions.

Old Pension Scheme (OPS):

• Defined benefit, non-contributory.
• Fully funded by the Government.
• Applicable to employees who joined on or before 31.12.2003.

National Pension System (NPS):

• Defined contribution with market-linked returns.
• Applicable to employees joining on or after 01.01.2004 (except armed forces).
• (b) & (c) State Adoption and Central Support:
• State Governments have autonomy to regulate employee service conditions.
• No mention of specific States showing interest or Central financial support in the reply.

Note: The response clarifies UPS as a middle path (assured benefits under NPS framework) but leaves State implementation to their discretion.

Keywords: UPS vs OPS vs NPS, Unified Pension Scheme 2025, Government pension schemes, NPS assured payout, OPS eligibility rules.