VRS New Rules: Employees taking VRS will now get pension in this way, know the new rule

 

VRS New Rules: The government has said that on opting for Voluntary Retirement Scheme (VRS) after completing 20 years or more of service, the subscriber will be entitled to a guaranteed payout on a pro-rata basis.

VRS New Rules: Good news for central government employees. The central government on Tuesday issued another new notification regarding the Unified Pension Scheme (UPS) and the National Pension System (NPS). It states that now, on opting for voluntary retirement after completing 20 years or more of service, a proportionate assured pension will be paid. This has been notified under the Central Civil Services Rules 2025. Employees who opt for the Voluntary Retirement Scheme (VRS) will get the benefit of proportionate pension.

The ministry gave this information on Tuesday

The Department of Pension and Pensioners’ Welfare has notified the Central Civil Services (Implementation of Integrated Pension Scheme under National Pension System) Rules, 2025 in the Official Gazette on September 2, 2025 to regulate service matters relating to benefits under UPS in respect of Central Government employees who have opted for UPS as an option under NPS. These rules, inter alia, provide for the option of voluntary retirement to UPS subscribers after completion of 20 years of service.

This is how those taking VRS will receive pension benefits.

  • According to the Department of Pension and Pensioners’ Welfare, the full assured payment under UPS is available only after completing 25 years of qualifying service. However, if a subscriber opts for the Voluntary Retirement Scheme (VRS) after completing 20 years or more of service, the assured payment will be payable on a pro-rata basis.
  • This means the sum of the years of qualifying service divided by 25, the assured payment. The payment will be payable from the date of retirement.
  • Other benefits, such as final withdrawal of 60% of the personal fund and a lump sum benefit of 1/10th of the basic pay and dearness allowance for each half-yearly service period, retirement gratuity, leave encashment, CGEGIS benefits, etc., can be availed upon retirement.
  • In addition, if a subscriber dies after taking the Voluntary Retirement Scheme (VRS) but before the assured payment commences, the family payment will be paid to the legally married spouse from the date of the subscriber’s death.

A chance to switch back from UPS to NPS

  • Earlier, on September 15th, the Department of Pension and Pensioners’ Welfare issued a notification stating that a one-time switch option from UPS to NPS has been provided for members opting for UPS. Under this, eligible employees under UPS can switch to NPS only once. The switch option can be exercised at least one year before retirement or three months before VRS.
  • The switch option will not be permitted in cases of punitive removal, dismissal, or compulsory retirement, or in cases where disciplinary proceedings are ongoing or pending. Employees who do not opt ​​for the switch within the stipulated time will remain under UPS. Members opting for NPS will receive NPS benefits and a 4% contribution amount. This switch option will provide members with the flexibility to choose UPS and an informed choice in planning for their post-retirement security.

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