New Pension Rules 2025: The central government has announced major changes to the CCS (Pension) Amendment Rules, 2025, where PSU employee may lose their benefits if they commit any misconduct. These retirement benefits vary from monthly pensions, family pensions, provident funds, gratuity, dearness allowance and benefits of 7th Pay Commissions as well.
Amendment In CCS (Pension) Rules, 2021:
This week, the Ministry of Personnel, Public Grievances & Pensions announced the amendments to Rule 37 of CCS(Pension) Rules, 2021.
The amended Rule 37(29C) is as follows:
"... the dismissal or removal from service of the public sector undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall lead to forfeiture of the retirement benefits for the service rendered under the Government also and in the event of his dismissal or removal or retrenchment the decision of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking
For this Rule, the relevant provisions of Rules 7 and 8 read with Rule 41 and Rule 44(5)(a) &(b) would be applicable analogous as applies to a Government servant under these Rules"
Rule 37 Of CCS (Pension) Rules, 2021:
The previous rule 37 of CCS said that: (1) On conversion of a department of the Central Government into a public sector undertaking, all Government servants of that Department shall be transferred en-masse to that public sector undertaking, on deemed deputation on terms of foreign service without any deputation allowance till they get absorbed in the said undertaking, and such transferred Government servants shall be absorbed in the public sector undertaking with effect from such date as may be notified by the Government.
The public sector undertaking shall frame its rules and regulations within a time frame not exceeding five years, it added.
The latest amendments are made in the Rule 37(29C) of CCS.
Earlier, rule 29 (C) said: the dismissal or removal from service of the public sector undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall not amount to forfeiture of the retirement benefits for the service rendered under the Government and in the event of his dismissal or removal or retrenchment the decisions of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking.
In simple words, earlier the central government employees had the option to avail retirement benefits despite their dismissal from the PSU after absorption. Now, if they are dismissed from PSUs due to wrongdoings, they will loose all the retirement benefits.
What are the retirement benefits offered by the government?
Central and PSU employees are eligible for retirement benefits after their services for 10 years minimum. Under the 7th Pay Commission, the minimum pension presently is Rs. 9000 per month, while maximum pension is 50% of the highest pay in the Government of India, which could rise to Rs. 1,25,000 per month. Pension is payable up to and including the date of death.
As per the government's Pensioners portal, following are the benefits of retirement:
1. Commutation of Pension: A Central Government servant has an option to commute a portion of pension, not exceeding 40% of it, into a lump sum payment. No medical examination is required if the option is exercised within one year of retirement. If the option is exercised after expiry of one year, he/she will have to undergo a medical examination by the specified competent authority, as per the Pensioners Portal which is a government website.
The formula for arriving at the commuted value of Pension (CVP) is --- CVP = 40 % (X) Commutation factor* (X) 12.
2. Retirement Gratuity: This is payable to the retiring Government servant. A minimum of 5 years of qualifying service and eligibility to receive service gratuity/pension is essential to get this one-time lump sum benefit. Retirement gratuity is calculated @ 1/4th of a month's Basic Pay plus Dearness Allowance drawn on the date of retirement for each completed six-monthly period of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable for a qualifying service of 33 years or more is 16½ times the Basic Pay plus DA, subject to a maximum of Rs. 20 lakhs.
3. Death Gratuity: This is a one-time lump sum benefit payable to the nominee or family member of a Government servant dying in harness. There is no stipulation in regard to any minimum length of service rendered by the deceased employee, as per the portal.
4. Services Gratuity: A retiring Government servant will be entitled to receive service gratuity (and not pension) if total qualifying service is less than 10 years. Admissible amount is half month's basic pay last drawn plus DA for each completed 6 monthly period of qualifying service. This one time lump sum payment is distinct from retirement gratuity and is paid over and above the retirement gratuity.
5. Deposit Linked Insurance Scheme: Under the GPF Rules, on the death of subscriber, the person entitled to receive the amount standing to the credit of the subscriber shall be paid an additional amount equal to the average balance in the account during the 3 years immediately preceding the death of the subscriber subject to certain conditions provided in the relevant Rule. The additional amount payable under that Rule shall not exceed Rs. 60,000/-. To get this benefit, the subscriber should have put in at least 5 years service at the time of his/her death.
6. Contributory Provident Fund: In exercise of powers conferred under Section 6A of the Employees' Provident Funds & Miscellaneous Provisions Act, 1952, the Central Government formulated the Employees' Pension Scheme, 1995. The Scheme provides pensionary benefits to the members upon superannuation/retirement. In addition, in case of death of member/member pensioner, the pensionary benefits are also given to widow and children/orphan/ nominee/dependent parents as per the provisions contained in the Scheme. The benefits under the Scheme are paid out of the Employees' Pension Fund into which the employer and the Central Government contribute @ 8.33% and 1.16% of the wages respectively subject to a wage ceiling of Rs.6,500/-.
7. Leave Encashment: Encashment of leave is a benefit granted under the CCS (Leave) Rules and is not a pensionary benefit. Encashment of Earned Leave/Half Pay Leave standing at the credit of the retiring Government servant is admissible on the date of retirement subject to a maximum of 300 days.
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