Option for NPS to Old Pension Scheme during 1.1.2004 to 28.10.2009 explanation

Central Government Employees those who were appointed on or after 1.1.2004 are in little bit confusion about DoPPW order regarding Option for NPS to Old Pension Scheme during 1.1.2004 to 28.10.2009

Recently DoPPW has issued an Office memorandum dated 11th June 2020 regarding Mobility of personnel amongst Central /State & Autonomous Bodies while working under Pensionable establishments.

This order has been misinterpreted and taken completely out of context in some media as such that those who were appointed during 1.1.2004 to 28.10.2009 can switch over to Old Pension Scheme from new Pension Scheme. This is not correct. As per this Order those who were appointed before 1.1.2004 in any Pensionable establishment under Central or State Government, are eligible to exercise the Option to go to Old pension Scheme if they joined Central Government Service during 1.1.2004 to 28.10.2009 after tendering Technical Resignation from that pensionable establishments.

Now this order extends this option to the government Servants who were forced to go on Voluntary Retirement from service to Join the central government service during 1.1.2004 to 28.10.2009. According to this order they can now exercise option for Old Pension Scheme and also eligible for counting of Past Service for pension benefits.

This DoPPW Order dated 11th  June 2020 states the following..

Who are eligible to Old Pension Scheme after 1.1.2004 ?

“ In which it has been stated that the benefit of counting of past service under the to CCS(Pension) Rules, 1972 was extended to those employees who were initially appointed before 1.1.2004 in (i) Central Government Departments covered under Railway Pension Rules or other similar non-contributing pensionable establishments of Central Government covered by old Pension Scheme /rules other than CCS(Pension) Rules, 1972 OR, (ii) State Government covered under old pension scheme similar to CCS(Pension) Rules, OR (iii) Central / State Autonomous Body covered by the old pension scheme and who resigned to join a Central Government Department / Office or a Central Autonomous Body having pensionable establishment.

Their past service can be counted for Pension Benefits ?

It has been decided that those employees who joined Central Government / Central Autonomous body under NPS during 1.1.2004 to 28.10.2009 after submitting technical resignation from Central Govt. / Central Autonomous Body or a State Government / State Autonomous Body and who fulfill the conditions for counting of past service in terms of this Department’s O.M. dated 28.10.2009,

may be given an option for induction in old pension scheme and to get their past service rendered in the Central / State Government or Central / State Autonomous Body counted for the purpose of pensionary benefits on their final retirement from the Central Government / Central Autonomous Body, subject to fulfilment of all other conditions of counting of such past service in terms of DPAR’s O.M. dated 29.8.1984 read with this Department’s O.M. dated 7.2.1986 as amended from time to time.

What is the last date for Exercising option to change to Old Pension Scheme ?

One can exercise Option for Old pension within three Months from the date of issuance of this Order

The Order says

“ Such option may be exercised within 3 months of issue of this O.M. Such employees who are appointed under NPS during 1.1.2004 to 28.10.2009 and are eligible to exercise option in terms of para 5 above but do not exercise the option within the stipulated period will continue to be covered by the provisions of National Pension System. Those employees who joined during 1.1.2004 to 28.10.2009 and have already been given the benefit of CCS(Pension) Rules in terms of O.M. dated 28.10.2009, will continue to be governed by those rules.”

What if the Govt servants availing Pension after resigning from Previous Service? In that case, can their past service be counted for pension benefits in New service?

Those employees who exercise option for counting of past service in accordance with the above provisions may be allowed to avail the benefit under CCS (Pension) Rules, 1972. The capitalized value of pension and gratuity for the past service in the Central / State Autonomous Body will be deposited by that Body to the Central Government / Central Autonomous Body in accordance with the instructions contained in the O.M. No. 28/10/84- Pension Unit dated 29.8.1984.

In case the employee concerned has received the pensionary benefits from the Central Government Departments, State Government, Central / State Autonomous Body, etc., he would be required to deposit the amount of such pensionary benefits (along with interest to be calculated in accordance with this Department’s O.M. No. 38/34/2001-P&PW(F) dated 29-07-2002) with the Central Government Department /Central Autonomous Body in which he has joined, to enable counting of past service.

What will happen to NPS fund after converting to Old Pension Scheme?

Employees Contribution will be deposited in GPF account and Employers Contribution will go to Government Accounts

The Provision of the DoPPW order in respect of NPS deduction is as follows

The employee’s share in the accumulated wealth of National Pension System with interest / returns accrued thereon under the NPS, would be deposited in the GPF account of the employee. The employer’s share along with interest / returns accrued thereon under the NPS would be deposited in the account of Central Government / Central Autonomous Body in accordance with modalities provided in para 9 of this OM.

Is this order applicable to those who joined Central Government Service after taking VRS from previous service ?

In some cases, due to non-availability of benefit of counting of past services under the old pension system during 01.01.2004 to 28.10.2009, the employees of State Government/State Autonomous bodies etc. may have been compelled to take voluntary retirement before joining pensionable Central Government Department/ Central Autonomous bodies after 01.01.2004 but before 28.10.2009. It has been decided that ‘voluntary retirement’ of such employees may be treated as ‘technical resignation’ and the benefit of provisions of para 5 to para 7 above may also be extended to them subject to fulfilment of all other conditions for counting of service.