Central Government Employees to Benefit from New Pension Scheme Reforms

Significant Changes in Pension Benefits for Government Employees

New Delhi: Union Minister Jitendra Singh announced on Wednesday that all central government employees enrolled in the Unified Pension Scheme (UPS) will now qualify for retirement and death gratuity benefits similar to those provided under the Old Pension Scheme (OPS).

This decision addresses a long-standing request from a significant number of government employees, ensuring equitable retirement benefits.

Singh, who serves as the Minister of State for Personnel, emphasized that this new provision demonstrates the government's dedication to providing social security for all employees under the National Pension System (NPS).

During a press conference discussing the Ministry of Personnel, Public Grievances and Pensions' transformative journey over the past 11 years, he outlined various reforms aimed at streamlining governance, empowering citizens, and enhancing administrative processes.

According to Singh, central government employees participating in the UPS will now be entitled to retirement and death gratuity benefits as stipulated in the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.

On Wednesday, the Department of Pension and Pensioners' Welfare (DoPPW) issued an order detailing the options available for employees to access benefits under the Old Pension Scheme in the event of a government servant's death during service or discharge due to invalidation or disability.

"This order allows employees to revert to OPS in case of death while in service. It is a progressive step that addresses the clarifications sought by employees," stated DoPPW Secretary V Srinivas.

Manjeet Singh Patel, President of the All India NPS Employees Federation, praised the order, calling it a historic and essential move by the government.

Patel noted that the inclusion of death-cum-retirement gratuity in the UPS will eliminate misconceptions among employees.

He expressed that the provision of OPS benefits in cases of death or disability during service under the UPS is a significant form of justice.

"As a result, many employees are likely to choose the UPS now," Patel added.

The DoPPW had previously notified the Central Civil Services (Implementation of National Pension System) Rules, 2021, to manage service-related matters for central government employees under the NPS.

Rule 10 allows every central government employee covered under the NPS to choose between benefits under the NPS or the Old Pension Scheme in the event of a government servant's death during service or discharge due to invalidation or disability.

"The UPS has been established as an option under the NPS. Consequently, it has been decided that central government civil employees opting for UPS under the NPS will also be eligible for benefits under UPS or the CCS (Pension) Rules, 2021, or the CSS (Extraordinary Pension) Rules, 2023 in cases of death during service or discharge due to invalidation or disability," the order stated.

On January 24, the finance ministry announced the introduction of UPS as an option under the NPS for new recruits in the central government civil service, effective from April 1, 2025. This provides a one-time option for central government employees under the NPS to join the UPS.

Every central government employee who selects the UPS under the National Pension System must, upon joining, complete an option form to avail benefits under the UPS or the CCS (Pension) Rules, 2021, or the CCS (Extraordinary Pension) Rules, 2023 in the event of death or discharge due to disablement or invalidation.

"Existing government employees who have opted for the Unified Pension Scheme under the National Pension System should also exercise this option as soon as possible following the notification of these clarifications," the order indicated.

In cases where a government servant dies while in service, the last option chosen by the deceased employee will be considered final, and their family will not have the right to change this option, as stated in the order sent to all central government departments.

Additionally, the DoPPW issued another order on Thursday clarifying that central government employees under the UPS will also qualify for retirement gratuity and death gratuity benefits as per the Central Civil Service (Payment of Gratuity under National Pension System) Rules, 2021.

DoPPW Secretary Srinivas remarked that this order "creates parity between NPS and UPS pensioners, allowing them to receive gratuity benefits of up to Rs 25 lakh."

Both orders were announced by Singh during the conference.