Retirement & Death Gratuity for UPS Railway Employees Extended

n a significant move benefiting thousands of Railway employees, the Ministry of Railways (Railway Board) has issued an official memorandum extending the benefits of Retirement Gratuity and Death Gratuity to those employees who opt for the Unified Pension Scheme (UPS).

This extension, detailed in the Railway Board’s communication RBE No. 66/2025, dated July 7, 2025, aligns the gratuity benefits for UPS-covered Railway employees with those already available under the National Pension System (NPS).

Background: What is the Unified Pension Scheme (UPS)?

The Unified Pension Scheme was introduced by the Ministry of Finance, Department of Financial Services, through Gazette Notification No. FX-1/3/2024-PR dated 24th January 2025. It provides a one-time option for Central Government employees, who are already covered under NPS, to switch to UPS with effect from 01.04.2025.

In line with this, the Railway Board adopted the scheme through its earlier letter F(E)III/2025/UPS/1 dated 18.03.2025.

Key Highlights of the Latest OM

Eligibility Extended: Railway employees who opt for the Unified Pension Scheme will now be eligible for Retirement Gratuity and Death Gratuity.
Same Terms and Conditions: These benefits will be provided on the same terms as those applicable to employees already covered under the National Pension System (NPS).
Reference OM: The extension follows the framework established under Board’s letter No. 2012/F(E)III/1(1)/4 dated 05.09.2016, which previously clarified gratuity entitlements under NPS.
Applicability Date: The provision is effective from 01.04.2025, coinciding with the rollout of UPS.

What This Means for Railway Employees

This is a welcome development for employees contemplating a switch to UPS. By ensuring parity in gratuity benefits, the Railway Board addresses a key concern among staff who might have hesitated to opt into the new pension scheme due to uncertainty over terminal benefits.

It also reflects the government’s broader approach to harmonize retirement benefits and provide financial security post-retirement, regardless of the pension framework employees are enrolled in.

View Railway Board Letter: