Refund of Employee Share with Returns in NPS in the event of Death of a Central Government employee : Key Insights into the CCS Rules and National Pension System-DoPPW OM dated 14.10.2024

Department of Pension and Pensioners’ Welfare has issued important Instructions regarding Refund of Employee Share with Returns in NPS in the event of Death of a Central Government employee as per CCS Rules and National Pension System Rules, 2021

Refund of Employee Share with Returns in NPS in the event of Death of a Central Government employee

No.57/06/2021-P&PW (B)
Government of India
Ministry of Personnel, Public Grievances and Pension
Department of Pension and Pensioners’ Welfare

Lok Nayak Bhawan, Khan Market
New Delhi, Dated 14th October, 2024

OFFICE MEMORANDUM

Subject: Refund of employee’s share with returns thereon on availing benefits under CCS (Pension) Rules, 1972 or CCS (EoP) Rules, 1939 in the event of death of a Central Government employee covered under National Pension System or his discharge on the ground of disablement or invalidation prior to notification of the Central Civil Services (Implementation of National Pension System) Rules, 2021 – reg.

The undersigned is directed to say that the New Pension Scheme (now called as National Pension System) (NPS) was introduced vide Ministry of Finance, Department of Economic Affairs’ notification No.5/7/2003-ECB & PR dated 22.12.2003.It was provided that NPS would be mandatory for all new recruits to the Central Government service from 1st or January 2004 except the Armed Forces.Simultaneously, the Central Civil Services (Pension) Rules, 1972 and the CCS (Extraordinary Pension) Rules, 1939 were amended to provide that those rules would be applicable to the Government servants appointed on or before 31.12.2003.

2. However, considering the hardship being faced by the Government servants appointed on or after 01.01.2004, benefits of CCS (Pension) Rules, 1972 or CCS (Extraordinary Pension) Rules, 1939 as the case may be, were extended on provisional basis, in the event of death of Government servant covered by NPS or his discharge from service on invalidation / disablement, vide this Department’s OM No.38/41/06/P&PW(A) dated 05.05.2009.These benefits being provisional in nature, were subject to adjustment against the final payments to be made in accordance with the Rules to be framed.

Know about your NPS Entitlement If likely to Resign

3. Thereafter, PFRDA notified PFRDA (Exits and Withdrawals under NPS) Regulation, 2015 under PFRDA Act on 11.05.2015 which stipulates that if the subscriber or the family members of the deceased subscriber, upon his death, avails the option of additional relief on death or disability provided by the Government, the Government shall have right to adjust or seek transfer of the entire accumulated pension wealth of subscriber to itself Therefore, on availing benefits under CCS (Pension) Rules, 1972 or CCS (Extraordinary Pension) Rules, 1939, as the case may be, by the Government employee or the family members, the entire accumulated pension corpus under NPS was transferred into the Government account.

4. Subsequently, Department of Pension and Pensioners’ Welfare notified Central Civil Services (Implementation of National Pension System) Rules, 2021 to regulate service related matters in respect to Central Government employees covered under National Pension System, These rules inter-alia provides that if on death of the Subscriber or his discharge from service on invalidation or disablement, benefits are payable to the family members / Government servant under the Central Civil Services (Extraordinary Pension) Rules, 1939 or the Central Civil Services (Pension) Rules, 1972, the Government contribution and returns thereon in the accumulated pension corpus of the Subscriber shall be transferred to Government account.

The remaining accumulated pension corpus shall be paid in lump sum to the Government servant or the person(s) in whose favour a nomination has been made under the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under National Pension System) Regulations, 2015, as the case may be.

5. The CCS (Implementation of NPS) Rules, 2021 are applicable from the date of their notification in the official Gazette i.e.31.03.2021

6. The matter has been examined in consultation with Department of Expenditure and Controller General of Accounts. It has been decided that in the cases relating to NPS employees, where Government servant or the family members had been granted benefits under CCS (Pension) Rules, 1972 or CCS (FOP) Rules, 1939 in place of NPS in accordance with the Department of Pension and Pensioners’ Welfare OM No.38/41/06-P&PW(A) dated 05.05.2009 and the entire accumulated pension corpus under NPS was transferred to the Government account, only the Government contribution with returns thereon in the accumulated pension corpus of the subscriber would be retained in Government account and remaining corpus would be paid hack to the Government servant or nominee(s) or legal heir(s), as the case may be, as provided in the CCS (Implementation of NPS) Rules, 2021.

7. These orders shall take effect from 01.01.2004.The employee’s contribution with returns thereon would be returned to the nominee(s) / legal heir(s) / Government servant, as the case may be, along with interest calculated for the period from the date of death / boarding out up to the date of payment of that amount, at rates and manner applicable to Public Provident Fund deposits from time to time.

8. In the cases related to Central Government employees covered under NPS, where Government servant or family members had been granted benefits under CCS(Pension) Rules, 1972 or CCS (FLOP) Rules, 1939 in accordance with the Department of Pension and Pensioners’ Welfare OM dated 05.05.2009 and has also been granted benefits from the accumulated pension corpus under NPS of the Government servant, the Government servant or the family member availing benefit of pension under pension rules would require to refund (in eases where NPS accumulations were not deposited into the Government account or not already refunded into Government account for availing benefit under pension rules) the Government contribution with return thereon in the accumulated pension corpus at the time of exit from NPS along with interest (upto the date of deposit in Government account) to be calculated at the same rate and manner as in the case of General Provident Fund applicable from time to time to continue to avail benefit under pension rules.

9. The accounting procedure for refund of employee’s share with return thereon along with up to date interest, as provided by Office of the Comptroller & Auditor General vide their ID note No.648/91 -GA/2014 dated 23.03.2023 and Controller General of Accounts vide their UO note No.TA-3-6/3/2020-TA-III/cs-4308/138 dated 31.03.2023 is attached at Annexure-A.

10. All Ministries / Departments arc requested to bring the contents of these orders to the notice of Controller of Accounts/ Pay and Accounts Officers and Attached, Subordinate offices under them.

11. This issues in consultation with Ministry of Finance, Department of Expenditure vide their ID Note No.1(15)/EV/2021 dated 17.01.2022 and in consultation with Controller General of Accounts vide their 1.1).Note No.TA-3-6/3/2020-TA-III/cs-4308 dated 21.04.2022.

12. In so far as the persons serving in the Indian Audit and Accounts Department are concerned.these orders are issued in consultation with Comptroller and Auditor General of India, as mandated under Article 148(5) of the Constitution of India.

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

To,

1.All Central Government Ministries / Departments.
2.Department of Expenditure, Ministry of Finance, North Block, New Delhi.
3.C&AG, Bahadur Shah Zafar Marg, New Delhi.
4.Ministry of Railways, Railway Board, New Delhi.
5.Department of Financial Services, Jeevan Deep Building, Parliament Street, New Delhi.
6.CGA, Department of Expenditure, INA, New Delhi.
7.NIC for posting on the website of this Department.

View the DoPPW OM dated 14.10.2024