The Central Government has recently issued crucial clarifications on pension and gratuity benefits under the Central Civil Services (Pension) Rules, 2021. Learn how the calculation of pension, gratuity, and service benefits will change upon completion of 10 years of service after compulsory retirement, and for less than 10 years of service, and why the approval of the Competent Authority will be crucial—this detailed information is crucial for your retirement security.
Compulsory Retirement
In this Office Memorandum issued under Rule 44 of the Central Civil Services (Pension) Rules, 2021, the government has fully clarified the pension and gratuity benefits for Central Government employees who are granted compulsory retirement. The government has clarified that all benefits received by employees will depend on their total service period and the final approval of the Competent Authority.
What will be received upon completing 10 years of service
According to government directives, if a government employee compulsorily retires after completing 10 years of eligible service, they will be entitled to a Compulsory Retirement Pension.
This pension will be a part of the Superannuation Pension. Its final percentage will be determined by the Competent Authority. This clearly means that the final pension amount will be determined based on both the length of service and the authority’s approval.
Gratuity Rules for Less than 10 Years of Service
Employees who compulsorily retire before completing 10 years of service will be awarded a Service Gratuity instead of a pension.
This gratuity will also be a fixed percentage of the Superannuation Gratuity and will be released only after the approval of the Competent Authority. The government has clarified that in both cases, the final authority remains with the concerned authority.
Strict Instructions to Ministries
The government has issued strict instructions to all ministries and departments to ensure that these crucial provisions are communicated to every employee to avoid any confusion. Employees must understand that there is a significant difference between the benefits received before and after completing ten years of service. Employees who have completed ten years of service have been advised to consult pension officials in advance to understand their retirement benefits.
The government believes this update will help employees better understand their financial planning and retirement security. This clarity is sure to dispel any misunderstandings regarding pension and gratuity in the event of compulsory retirement.