Important news has emerged for railway employees. The Ministry of Railways has announced the rules for the Unified Pension Scheme for employees under the National Pension System (NPS), including UPS eligibility, employee and government contributions, pension calculation, family pension, voluntary retirement (VRS), and rules for migrating from UPS to NPS.

What will employees get under UPS?
Under the Unified Pension Scheme, railway employees are entitled to a minimum monthly pension of Rs 10,000 after completing 10 years of service. They can receive a full, permanent pension after completing 25 years of eligible service. Employees are also given the option of voluntary retirement after completing 20 years of service. The central government implemented the UPS scheme under the NPS from April 1, 2025. UPS is being implemented in phases across various central government departments, and now the Indian Railways has also implemented the scheme for its employees.

Which railway employees will be covered under UPS?
Railway employees recruited on or after January 1, 2004, and covered under NPS will be eligible for UPS. However, casual or daily wage employees, contract employees, and certain categories of employees covered under other pension rules will not be eligible for UPS. Under UPS, contributions will be made by both the railways and the employees. The railways will contribute 10 percent of the employee's basic salary and dearness allowance (DA).

How much will employees contribute?
Railway employees who join UPS will be required to deposit 10% of their basic salary and DA into their personal UPS account every month. Even if the employee is on probation or on deputation to a central or state government department, their contribution will continue. The railway's contribution will also continue as per the rules. Importantly, a railway employee will have the option to switch from UPS to NPS once during their service. However, once they choose NPS, they will not be allowed to return to UPS. Under UPS, there is a provision for a family pension to the legal spouse of an employee upon their death. This amount will be 60% of the employee's fixed pension. There is also a provision for dearness relief (DR) on the pension and family pension received under UPS.

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