Benefits for NPS Pensioners – you must know these

To cut down the pensionary budget of the state, Govt of India and several State Govt/PSUs have adopted National Pension System (NPS) wef  01.04.2004. In this system you need to contribute a portion of amount and your employer is also bounded to pay a certain amount every month in your NPS Account. National Pension System (NPS) was introduced for Central Government employees vide Ministry of Finance (Department of Economic Affairs) Notification No. 5/7/2003-ECB & PR dated 22nd December, 2003. NPS is now regulated under PFRDA Act, 2013 and regulation framed thereunder by Department of Financial Services and PFRDA.

NPS is aimed to ensure organized arrangement for contributory pension after retirement from the Govt organization. After retirement a certain portion of the total amount credited to your account can be withdrawn in lump sum and you will get pension from the remaining portion of your amount with NPS based on the NAV /ROI of the amount.  It is well known to all. In addition you will get following benefits:

Retirement Gratuity & Death Gratuity for NPS Employees

To get retirement gratuity, you need to render minimum 5 years of continuous service.  The provision of retirement Gratuity has been introduced for NPS pensioners wef 2016. Department of Pension and Pensioners’ Welfare O.M. No. 7/5/2012- P&PW(F/B) dated 26.08.2016- The benefit of retirement gratuity and death gratuity have been extended to the Central Government employees covered under NPS vide DoPPW O.M. dated 26.08.2016 on the same terms and conditions as are applicable under CCS(Pension) Rules, 1972.

After revision of EOP Rules, all central Govt employees are now eligible to get Disability pension and invalid pension irrespective of their length of service.

Family Pension in the event of in service death of Govt Employees

Department of Pension and Pensioners’ Welfare O.M. No. 38/41/06- P&PW(A) dated 05.05.2009- Benefits under CCS(Pension) Rules, 1972 or CCS(Extraordinary Pension) Rules, 1939 were extended to the Central Government employees covered under NPS vide Department of Pension and Pensioners’ Welfare O.M. dated 05.05.2009 in the event of in-service death of Government servant or his discharge from Government service on account of invalidation or disablement.

Continuation of service on transfer to other department

DoPPW O.M. No.7/5/2012-P&PW(F/B) dated 12.02.2020 has been issued for providing instructions regarding counting of service for the purpose of grant of gratuity or grant of pro-rata gratuity in case of mobility of a Central Government employee to other organizations through proper channel.

Counting of Past Service for NPS Employees

DoPPW OMs. No. 28/30/2004-P&PW(B) dated 26.07.2005 and 28.10.2009- Instructions were issued by DoPPW vide OM dated 26.07.2005 for counting of past service rendered in a Government service or service of an autonomous body having CCS(Pension) Rules and appointed on or before 31.12.2003 on mobility to Central Government service / service of an autonomous body on or after 01.01.2004 after submitting technical resignation from previous service to provide for the continuance of pensionary benefits based on combined service in accordance with CCS (Pension) Rules, 1972.

Disability element for NPS Employees

DoPPW OM No. 1/3/2019-P&PW(E) dated 01.01.2021- Instructions have been issued vide DoPPW OM dated 01.01.2021 that if a Government employee appointed on or after 01.01.2004 and covered under NPS is disabled, he shall also be eligible to receive a lump sum compensation computed in terms of rule 9(3) of CCS(Extraordinary Pension) Rules, if the disablement is attributable to Government service and the Government employee is retained in service in spite of such disablement.

Pensionary benefit  under NPS (Exit from Scheme)

On exit from NPS on superannuation, an individual is mandatorily required to invest at least 40% of the accumulated pension corpus in Tier-I to purchase an annuity from an Annuity Service Provider an Insurance Regulatory and Development Authority (IRDA) regulated Insurance Company registered with PFRDA and a maximum of 60% of the accumulated corpus in the Tier –I account is given to the individual in lump sum. If the Government servant exits from NPS before superannuation (i.e. before 60 years of age), he/ she has to invest at least 80% of the accumulated corpus to purchase an annuity and the remaining 20% can be withdrawn as lump sum. The earning from the invested amount will be paid to the beneficiary as pension every month.

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