Unified Pension Scheme: UPS Subscribers Can Invest Up To 50% In Equity – News18
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UPS Subscribers will have an option of the Moderate Life Cycle Fund with maximum exposure to equity capped at 50%.
Unified Pension Scheme.
Unified Pension Scheme: UPS subscribers can invest up to 50 per cent of their retirement corpus in equity, according to the latest UPS regulations notified by the pension fund regulator PFRDA on March 19. The subscribers will also have a choice of pension fund other than default pattern.
According to the Pension Fund Regulatory and Development Authority (Operationalisation of Unified Pension Scheme Under National Pension System) Regulations, 2025, UPS subscribers will have three options:
1) To invest 100% of the funds in government securities (Scheme G); or
2) To invest in any of the following Life Cycle-based schemes:
a) Conservative Life Cycle Fund with maximum exposure to equity capped at 25% (LC-25); or
b) Moderate Life Cycle Fund with maximum exposure to equity capped at 50% (LC-50).
“UPS Subscriber shall have an option to change the choice of pension fund once in a financial year and investment choice twice in a financial year,” the PFRDA said in the notification.
UPS Subscriber exercising choice of pension fund and investment pattern, as permissible, shall be entitled to surplus amount, if any, or be liable for shortfall, if any, in the individual corpus under UPS, as compared to the benchmark corpus, it added.
Surplus amount computed on the date of superannuation or voluntary retirement or retirement under Fundamental Rules 56(j) shall be paid to the UPS subscriber after issuance of the UPS Payout order.
Importantly, retirement under the Fundamental Rules 56(j) is not treated as penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965.
Shortfall amount may be replenished by the UPS subscriber at any point of time before or on superannuation or voluntary retirement or retirement under Fundamental Rules 56(j) and not later than submission of Form B1. If not replenished, the UPS subscriber will be entitled for a reduced payout at the time of superannuation or retirement.
The UPS, which was announced in January this year, will be implemented on April 1, 2025.
This new scheme, which combines aspects of both the Old Pension Scheme (OPS) and the National Pension System (NPS), aims to provide employees with a guaranteed pension, offering financial stability and dignity after retirement.
Under the National Pension System, NPS subscribers can invest up to 75 per cent of their contribution to equity (E asset class) until the age of 50, under active choice. Thereafter, it gradually reduces to 50% by the age of 60.
