DoPPW vide its OM dated 9.4.2024 issued Clarification regrading NPS to OPS to those employees who have since been retired
Clarification regrading NPS to OPS to Retired Employees Clarification
No. 57/05/2021-P&PW(B)/8860
Government of India
Ministry of Personnel, Public Grievances and Pensions
Department of Pension and Pensioners’ Welfare
Table of Contents
3rd Floor, Lok Nayak Bhavan, Khan Market,
New Delhi, Dated the 09.04.2024
OFFICE MEMORANDUM
Subject: Options for inclusion under the Central Civil Services (Pension) Rules, 1972 in accordance with DoPPW OM dated 03.03.2023 to those employees who have since been retired- reg.
The undersigned is directed to say that the Department of Pension and Pensioners’ Welfare administers pension related policy matters in respect to Central Government civil employees. This Department has issued instructions vide OM No. 57/05/2021-P&PW(B) dated 03.03.2023 giving one time option to the Central Government civil employee for inclusion under the CCS(Pension) Rules, 1972 ( now 2021) who has been appointed against a post or vacancy which was advertised/ notified for recruitment/ appointment prior to notification for National Pension System i.e. 22.12.2003. As per para 7 of this OM, it is for the appointing authority of the post against which such option has been exercised to examine and decide applicability of these instructions.
2.Further, instructions were issued vide OM No. 57/03/2022-P&PW(B)/8361(1) dated 20.10.2023 on the question of applicability of aforesaid instructions dated 03.03.2023 to the Central Government employees who have since retired from service before issue of these instructions.
3.Further, references were received seeking clarification with respect to applicability of aforesaid instructions dated 03.03.2023 to the Central Government employees who have since retired from service before issue of these instructions. Accordingly, following FAQs are being issued to deal with these matters :
Clarification regrading NPS to OPS
| S. No. | Points on which clarification sought | Comments of DoPPW |
| (i) | The OM dated 20.10.2023 requires refund of two elements viz. (a) Government contribution and return thereon under NPS and (ii) interest thereon. While the amount of Government contribution and the return thereon in the accumulated corpus of wealth under NPS account of the subscriber at the time of his exit on retirement would be ascertained from NSDL, the rate and manner of recovery of interest (simple or compound and the’ rates at which compounding is to be done) from the date of exit to the date of refund by the employee is not clear. | In the DoPPW OM dated 20.10.2023, it was clarified that there is no restriction on applicability of aforesaid OM dated 03.03.2023 to Central Government employees who are otherwise eligible for the coverage under OPS and who already retired from service. Since, in this case, employee has already availed benefits under NPS, the Government contribution and return thereon under the NPS would require to be refunded along with interest thereon by the Government servant in order to avail the benefit under the CCS(Pension) Rules, 1972, in case, he is found eligible for coverage under old pension scheme in terms of DoPPW OM dated 03.03.2023. The rate and manner of calculation of interest on the amount to be refunded would be in accordance with the instructions issued by this Department vide O.M. No. 38/34/2001-P&PW(F) dated 29.04.2002 i.e. the interest would be calculated at the same rate and in the same manner as in the case of GPF deposits, applicable from time to time for the period from the date of receipt of pensionary benefits to date of refund to the Government. |
| (ii) | (ii) The OM is silent on the date upto which the return on the Government contribution Is to be recovered. Whether it is upto the date of Superannuation/ retirement or date of conversion from NPS to pension under CCS (Pension) rules. If the date of recovery of return is upto the date of superannuation/ retirement of the employee, then whether any adjustment or recovery from the annuity availed by the employee after the date of retirement is required to be made or not and if so, the manner of recovery/ adjustment. | |
| (iii) | The order does not indicate the date from which the pension is to be given to the retired employee. As the retire Government contribution along with interest is to be recovered from the retired employees, apparently the pension may become payable from the date of their retirement on superannuation. This may be got clarified. | The pension is to be granted from the next date of superannuation/retirement of the Government employees i.e. if the employees had superannuated or retired w.e.f. 31.01.2023, the pension would start from next date 1.e. 01.02.2023. |
| (iv) | In case of serving employees, GPF account is opened on their migration from NPS to old pension scheme under CCS (Pension) Rules. The OM is silent on opening of GPF account in this case. As the employee’s contribution and return thereon is not being recovered, there is nothing to credit to their GPF account. So GPF account of the employee may not be opened. This may be got clarified. | There is no question of opening of any GPF account in respect to retired officers for their inclusion under OPS. |
| (v) | Those retired Government employees who have not yet withdrawn the benefit under NPS, the OM its not clear on whether (a) their entire corpus is to be withdrawn from NSDL and their share along with return thereon in the accumulated corpus on the date of exit from NPS is to be returned to them directly or his contribution is to be deposited in the GPF account to be opened and then closed with interest | In case, the accumulated corpus has not been withdrawn by Government servant on his retirement, then the NPS account would be closed and the Government contribution along with return thereon in the corpus at the time of exit would be transferred into the Government account and there is no question of any interest on such amount. |
| (vi) | In respect of cases mentioned in (v) above, as far as the government contribution and return thereon is concerned, the same may be credited in the Government account. No interest is involved in this case. This may be got clarified. |
(S. Chakrabarti)
Under Secretary to the Govt. of India
To
All Ministries/Departments/Organizations,
(As per standard list)
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In case of govt servants who have already withdrawn NPS benefits and are in receipt of pension under NPS the following procedure should be followed. All withdrawals from the NPS account after retirement whether as lumpsum or as pension payouts must be returned with interest thereof. The interest rates should be based on the prevailing interest rates applicable for senior citizen in nationalized banks and not the GPF interest rates. The govt in return will return the NPS contributions of the employees along with interest at the prevailing GPF rates as if the deposits were being made to a GPF account. The rate of interest on this amount should be based on prevailing GPF rates and interest must be paid till the date on which the GPF amount is disbursed to the employee. The employee would also be eligible for pension for the period after his date of retirement. Interest at prevailing GPF rates should also be applicable on this pension amount till the date of disbursement. A comparison of the amount to be returned by the employee with the amount that needs to be paid by the govt to the employee must be made and the difference must be paid either by the employee or by the govt. This difference amount is likely to change every month as the NPS pension would continue to be paid each month and the pension under OPS would become due each month till final settlement is made. It may not be possible for some NPS pensioners to deposit a lump sum amount and become eligible for NPS immediately or even after a number of years based on where they have invested their NPS proceeds. No retired employee should be penalised on account of this. The employee must be given the right to decide the final date of settlement. Eventually the amount to be refunded to the govt will become less than the amount due to the employee. At such time the employee/spouse should automatically be covered by the OPS or family pension as applicable.
In response to point no (v)& (vi ) it is stated that “In case, the accumulated corpus has not been withdrawn by Government servant on his retirement, then the NPS account would be closed and the Government contribution along with return thereon in the corpus at the time of exit would be transferred into the Government account and there is no question of any interest on such amount.”
This is classic case of answering a question correctly without throwing any light on the point on which clarifications is being sought. Nobody is interested in knowing what happens to the government contribution so why talk about it. People are only interested in knowing what happens to their own contributions to the NPS. The reply
talks about closing of NPS account and transfer of the govt contribution to the government account. But what happens to the NPS contributions of the employee? Contributions by similarly placed employees into GPF would be returned with interest thereof at prevalent GPF rates during the years in which the amount had remained with government. In case of NPS contributions by the employees…. what happens?Would the employees contributions be returned with market linked values at the time of closing the account? Nobody other than the audit authorities is likely to complain if the market linked values are greater than the corresponding GPF returns. But if the returns are less than the GPF returns the employee is justified in complaining because he is suffering a monetary loss in comparison with a similarly placed employee under the GPF scheme.
I suggest that it should be clarified that the employees contributions to the NPS would be returned to the employees with cumulative interest based on the prevailing GPF interest rates applicable during the period during which the deposits were made to the NPS schemes. It is also advisable to open a GPF account for this purpose so that all records are maintained as if the employee was under the GPF scheme