Three pension schemes shape the government-job conversation. OPS gives a guaranteed pension of about 50% of last basic pay with no employee contribution, but is closed to central-government recruits who joined on or after 1 January 2004. NPS is market-linked — you contribute 10% of basic plus DA, the government adds 14%, and the payout depends on your corpus. UPS, effective 1 April 2025, assures 50% of your average basic of the last 12 months (for 25+ years of service), a minimum of Rs 10,000 a month, with employee 10% and government 18.5% contribution. A new central recruit chooses between UPS and NPS, not OPS. This guide compares all three with the confirmed official figures.
By Saurabh Kamal, Senior Editor — Strategy & Prep. Published 8 July 2026. Last verified 8 July 2026.
In short
- OPS (Old Pension Scheme) gives a guaranteed pension of about 50% of last basic pay, with no contribution from the employee — but it is closed to central-government recruits who joined on or after 1 January 2004.
- NPS (National Pension System) is market-linked: you contribute 10% of basic + DA, the central government adds 14%, and your pension depends on the corpus and annuity — no guaranteed amount.
- UPS (Unified Pension Scheme), effective 1 April 2025, offers an assured pension of 50% of your average basic of the last 12 months (for 25+ years of service), a minimum of ₹10,000/month, with employee 10% and government 18.5% contribution.
- A new central-government recruit chooses between UPS and NPS (not OPS). UPS is optional; if you do not opt, you stay on NPS.
Pension is one of the biggest — and most confusing — questions for anyone joining a government job. Three schemes now share the conversation: the old guaranteed OPS, the market-linked NPS, and the newer assured-pension UPS. This guide explains each in plain language and what a new recruit actually needs to decide. (All figures below are from the official PIB and PFRDA notifications; still confirm the current rules for your service before acting.)
OPS — the Old Pension Scheme
- Type: Defined benefit — the pension amount is fixed by a formula, not by market returns.
- Pension: About 50% of the last drawn basic pay (or the average of the last 10 months, whichever is higher), plus Dearness Relief.
- Employee contribution: None. OPS is non-contributory and paid from the government budget.
- Who is on it: Central-government employees who joined before 1 January 2004. It is not available to those who joined on or after that date.
OPS is the most generous for the employee because it guarantees a large pension with no contribution — which is exactly why governments moved away from it, as the unfunded liability grew.
NPS — the National Pension System
- Type: Defined contribution — market-linked. Your money is invested, and your eventual pension depends on the accumulated corpus.
- Contributions: Employee 10% of (basic + DA); central-government employer 14% (the employer share was raised from 10% to 14% with effect from FY 2019-20).
- Payout: At retirement, a part of the corpus is withdrawn and the rest buys an annuity that pays a monthly pension — so the amount is not guaranteed and varies with market performance and annuity rates.
- Who is on it: Central-government employees who joined on or after 1 January 2004 (until UPS became an option).
NPS gives portability and a transparent individual account, but it carries market risk and no assured pension — the concern that led to UPS.
UPS — the Unified Pension Scheme
Notified by the central government and effective from 1 April 2025, UPS is designed to give NPS-covered employees an assured pension while remaining contributory.
- Assured pension: 50% of the average basic pay of the last 12 months, for those with at least 25 years of qualifying service (proportionate for shorter service, down to a 10-year floor).
- Minimum pension: ₹10,000 per month after at least 10 years of service.
- Contributions: Employee 10% of (basic + DA); government 18.5% — structured as a 10% match into your individual fund plus 8.5% into a separate pooled corpus.
- Family pension and Dearness Relief provisions apply as per the scheme rules.
- Eligibility: Central-government employees under NPS — existing staff, new recruits (on or after 1 April 2025), and NPS retirees who exited on or before 31 March 2025.
UPS is optional: an employee can choose UPS or stay on NPS, but the choice is a one-time, one-way decision (you can switch from UPS to NPS once, not back). New central-government recruits get 30 days from joining to opt. The general option window for existing employees and past retirees closed on 30 November 2025, so any "how to opt" step now applies mainly to fresh recruits.
NPS vs OPS vs UPS — side by side
| Feature | OPS | NPS | UPS |
|---|---|---|---|
| Type | Guaranteed (defined benefit) | Market-linked (defined contribution) | Assured, contributory |
| Employee contribution | None | 10% of basic + DA | 10% of basic + DA |
| Government contribution | — (budget-funded) | 14% | 18.5% |
| Pension amount | ~50% of last basic (guaranteed) | Depends on corpus + annuity (not fixed) | 50% of last-12-months average basic (assured, 25+ yrs) |
| Minimum pension | As per rules | Not assured | ₹10,000/month (10+ yrs) |
| Available to new recruits? | No (closed after 1 Jan 2004) | Yes | Yes (opt within 30 days) |
What a new recruit should understand
If you are joining a central-government post now, OPS is not on the table — your choice is UPS or NPS. The trade-off is straightforward: UPS gives you an assured 50% pension (with the government putting in more, 18.5% vs NPS's 14%), while NPS keeps your money fully market-linked with the chance of a larger corpus but no guarantee. For most employees who value certainty of a retirement income, the assured payout of UPS is the headline attraction; those comfortable with market risk and seeking maximum upside may weigh NPS. Read your service's official option form carefully, note the 30-day window, and remember the switch is largely one-way.
A note on states: several states announced OPS restoration in 2022–23, and states may adopt UPS for their own employees, but the per-state position is fluid and changes with each state's notifications — so check your own state's latest circular rather than assuming. This guide covers the central-government rules.
If you want to understand how your basic pay (which drives all three pensions) is fixed, see our explainer on the 7th Pay Commission pay matrix and pay levels.