Section 9 of The Unified Pension Scheme
The contributions shall be invested and managed by the pension fund(s) with an objective to optimize returns on the investments, ensuring safety of contribution in the interest of UPS subscriber(s). The pension fund(s) shall take adequate steps and exercise prudence, diligence, and its technical expertise while undertaking fund management.
Section 10 of The Unified Pension Scheme
(1) The Pool Corpus shall be allocated to such pension fund(s) as determined by the Central Government, who shall invest the funds in accordance with the investment pattern and related aspects thereto, as approved by the Central Government. The Authority shall, subject to such instructions, issue investment guidelines which the pension funds shall adhere to.
(2) The Pool Corpus shall be audited annually by an auditor to be appointed by the Authority.
Explanation: Auditor shall have the same meaning as mentioned under section 141of the Companies Act, 2013.
Section 11 of The Unified Pension Scheme
(1) UPS Subscriber shall have an option to choose the pension fund and the investment pattern including a default pattern in accordance with the guidelines issued by the Authority, for the investment of contributions made in the individual corpus under UPS.
(2) UPS Subscriber shall have the choice of default pattern of pension fund(s) and default investment; or
(3) A UPS Subscriber may choose any one of the pension funds registered with the Authority.
Provided that a UPS subscriber not exercising such choice of pension fund shall be deemed to have opted for default pattern as determined by the Authority.
(4) A UPS Subscriber exercising choice of pension fund other than default pattern, shall choose any one of the following investment choices:
(i) option to invest hundred percent. of the funds in Government securities (Scheme G); or
(ii) option of any one of the following Life Cycle based schemes:
(A) Conservative Life Cycle Fund with maximum exposure to equity capped at twenty- five percent. LC-25; or
(B) Moderate Life Cycle Fund with maximum exposure to equity capped at fifty percent. LC-50.
(5) 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.
(6) Pension fund shall give out easily understandable information about past performance of its schemes to the UPS Subscriber to enable such subscriber to make informed choices while opting for pension fund and investment patterns.
(7) 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.
(8) Surplus amount (i.e., the excess of individual corpus over benchmark corpus), if any, computed on the date of superannuation or voluntary retirement or retirement under Fundamental Rules 56(j) (which is not treated as penalty under Central Civil Services (Classification, Control and Appeal) Rules, 1965), as may be applicable, shall be paid to the UPS subscriber after issuance of the UPS Payout order.
(9) Shortfall amount (i.e., the deficit of individual corpus as compared to benchmark corpus), if any, 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) (which is not treated as penalty under Central Civil Services (Classification, Control and Appeal)
Rules, 1965), as may be applicable, and not later than submission of Form B1. If such shortfall is not replenished by the UPS Subscriber, then such subscriber shall be entitled to proportionately reduced payout at the time of superannuation or retirement.
(10) The value and units in the individual corpus and benchmark corpus of the UPS Subscriber shall be informed to such subscriber by the CRA.
Provided that a final computation of the value of the individual corpus as compared to the benchmark corpus of a UPS Subscriber shall, for the purpose of availing benefits, be determined as on the date of superannuation or voluntary retirement or retirement under Fundamental Rules 56(j) (which is not treated as penalty under Central Civil Services
(Classification, Control and Appeal) Rules, 1965), as may be applicable.
(11) The information of individual corpus and the benchmark corpus of a UPS Subscriber shall be available in the UPS PRAN account statement on a monthly basis
Section 12 of The Unified Pension Scheme
(1) For each employee covered under NPS, who has exercised the UPS option, a benchmark corpus value shall be computed by CRA for comparison with individual corpus based on the following assumptions:
(i)
regular and timely receipt of applicable contributions of both, employer and employee, for each month of qualifying service, as specified under sub-regulation (1) and (2) of regulation 6;
(ii)
contributions being invested as per default pattern determined by the Authority;
(iii)
(iv)
(v)
no partial withdrawals made during accumulation phase;
any voluntary contributions made shall not be considered; and any contributions for the period before the commencement of the qualifying service under the Central Government shall not be considered.
(2) The Benchmark Corpus value shall be based on the net asset value (NAV) of the default pattern, and corresponding units in the benchmark corpus. In respect of missing contribution(s), for any period, the net asset value shall be based on last working day of the month in which contribution(s)is to be received, for the period from 01st April 2025 and the same shall be declared for each month by the Authority.
(3) Where UPS Default Pattern is managed by more than one pension fund, the weighted average NAV shall be considered based on the ratio of the monthly average asset under management (AAUM) of UPS scheme managed by the pension fund to the total AAUM of UPS Default pattern managed by such multiple pension funds. The formula for calculating the weighted average NAV is as under: The NAV computed using the above-mentioned methodology for the past period is provided under Schedule II. (4) Benchmark corpus shall be computed in the following manner:
(i)
Partial withdrawals made out of individual corpus and voluntary contributions made into the individual corpus shall not be considered in the computation.
(ii) For contributions received prior to 1st April, 2025: monthly contributions shall be considered as and when they have been received and be valued on default pattern.
(iii) For contributions received on or after 1st April, 2025: (a) monthly contributions which are to be received in that month, shall be considered as and when received during the month and valued on default pattern.
(b) In the event of any missing contribution in any month, value shall be based on the weighted average NAV of default pattern as on the last working day of the month applied to monthly contributions of previous full month.
(iv) Contributions arising from arrears, such as arrears of Dearness Allowance shall be considered and valued on the default pattern as and when they are received.
(5) Illustrative examples as to working of benchmark corpus under different scenarios are provided under Schedule III.