NPS Entitlement Decoded: What Happens to Your Pension on Absorption into a New Company or Corporation? DoPPW Instructions 7th October, 2024

When employees are absorbed into a new company, corporation, or public-sector entity, it raises several questions about their entitlements, especially those linked to the National Pension System (NPS). Understanding how NPS contributions, withdrawals, and continuity are managed during this transition is crucial for employees to avoid disruptions in their retirement planning

NPS Entitlement on Absorption into a New Company or Corporation

No.57/03/2022-P&P W(B)/8361(4)
Government of India
Ministry of Personnel, Public Grievances and Pensions
Department of Pension and Pensioners’ Welfare

Lok Nayak Bhavan, Khan Market,
New Delhi, Dated the 7th October, 2024

OFFICE MEMORANDUM

Subject: Entitlement on absorption in or under a corporation, company or body in respect of Central Government servant covered under the National Pension System -reg.
हिन्‍दी: राष्ट्रीय पेंशन प्रणाली के अंतर्गत कवर किए गए केंद्र सरकार के कर्मचारी के आमेलन होने पर हकदारी-संबंधी DoP&PW का द‍िनांक 07.10.2024 का कार्यालय ज्ञापन

The undersigned is directed to say that Department of Pension and Pensioners’ Welfare has notified the Central Civil Services (Implementation of National Pension System) Rules, 2021 to govern the service related matters of Central Government civil employees covered under the National Pension System.

What Happens to Your Pension on Absorption ?

2. Rule 15 of the Central Civil Services (Implementation of NPS) Rules, 2021 provides for entitlement on absorption in or under a corporation, company or body (autonomous or statutory) in respect of a Central Government servant covered under the National Pension System.

The rule provides that a Government servant who has been permitted to be absorbed in a service or post in or under a Corporation or Company wholly or substantially owned or controlled by the Central Government or a State Government or in or under a Body ( autonomous or statutory ) controlled or financed by the Central Government or a State Government, shall be deemed to have retired from service from the date of such absorption and shall be eligible to receive benefits under the National Pension System in accordance with the Pension Fund Regulatory and Development Authority ( Exits and Withdrawals under National Pension System) Regulations, 2015 as admissible in the case of exit of Subscriber on superannuation.

3.The Subscriber shall continue to subscribe to the National Pension System with the same Permanent Retirement Account Number in the new organisation if the same system exists in the new organisation and in that case he shall not receive any benefit under the National Pension System at the time of such absorption but shall receive benefits after exit from the new body or organisation, etc. where Subscriber has been absorbed.

4.However, in case, the employees of such autonomous or statutory body or public sector undertaking are not covered by the National Pension System, such subscriber may, at his option, continue to subscribe to the National Pension System with the same Permanent Retirement Account Number as a non-Government subscriber, in accordance with the regulations notified by Pension Fund Regulatory and Development Authority (PFRDA).

5.All Ministries/Departments are requested that the above provisions regarding entitlement on absorption in or under a corporation, company or body in respect of a Central Government servant covered under the National Pension System may be brought to the notice of the personnel dealing with the NPS matters of employees in the Ministry/Department and attached/subordinate offices thereunder, for — strict implementation.

(S. Chakrabarti)
Under Secretary to the Government of India

To
All Ministries/Departments/Organisations,
(As per standard list).

View the NPS Entitlement Order Copy in English / Hindi pdf