Central govt employees’ pension: NPS to OPS switch? Centre releases new FAQ answering all your queries

Last year, the Centre offered a one-time window to the central government employees to switch from the National Pension System (NPS) to CCS (Pension) Rules, 1972 (now 2021), which was popularly known as the old pension scheme. Those who have shifted to the old pension scheme have several questions regarding how it will be implemented. To answer those queries, the Department of Pension and Pensioners’ Welfare (DoPPW) released a frequently asked questions (FAQs). Read here to find out.

In an Office Memorandum dated April 9, 2024, Department of Pension and Pensioners’ Welfare said:

1) The OM dated 20.10.2023 requires a 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 the 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 the 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, the 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.

2) The OM is silent on the date up to which the return on the Government contribution Is to be recovered. Whether it is up to the date of Superannuation/ retirement or the date of conversion from NPS to pension under CCS (Pension) rules. If the date of recovery of return is up to 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.

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.3) The order does not indicate the date from which the pension is to be given to the retired employee. As the retired 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 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 the next date 1.e. 01.02.2023.

4) In the case of serving employees, a GPF account is opened on their migration from NPS to the 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 are 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 clarified.

There is no question of opening any GPF account concerning retired officers for their inclusion under OPS.

5) i) For Those retired government employees who have not yet withdrawn the benefit under NPS, the OM is 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.

ii) In respect of cases mentioned in (v) above, as far as the government contribution and return thereon is concerned, the same may be credited to the government account. No interest is involved in this case. This may be clarified.

In case, the accumulated corpus has not been withdrawn by the 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.