NPS: Major update to pension rules! Center clarifies on bonuses and other retirement benefits for THESE public servants

The Department of Pensions and Pensioners’ Welfare (DoP&PW) has outlined how compulsory retirement, dismissal or removal from public service affects the National Pension System (NPS) corpus for central government employees, a recent memorandum from the office revealed dated October 11th.

The memorandum states that the Central Civil Service (NPS Implementation) Rules, 2021 govern matters relating to Central Government civil servants under NPS. Specifically, Rule 18 addresses the consequences of compulsory retirement or removal on an employee’s accumulated pension pool.

According to this rule, if a central government employee covered under NPS is retired, dismissed or compulsorily dismissed, his lump sum payment and annuity from the accumulated pension corpus will be provided in accordance with the regulations of the Fund Regulatory and Development Authority of Pensions (PFRDA).

Also read: Good news for central government employees! Expanded CGHS, ECHS Services – Check Rate Updates

This payment will follow the procedures applicable when a subscriber exits NPS before retirement.

Employees have the option to continue contributing to NPS with the same Permanent Retirement Account Number as non-government subscribers, based on the authority’s regulation.

It is important to highlight that these provisions do not affect any actions related to bonuses and other retirement benefits not covered by these rules; these will follow existing regulations.

The DoP&PW has requested that all ministries and departments share this information with staff dealing with NPS issues to ensure proper implementation.