The Central Government recently issued important clarifications regarding the benefits available on compulsory retirement under Rule 44 of the Central Civil Services (Pension) Rules, 2021, through an Office Memorandum. The government clarified that all benefits available to employees will depend on their total service period and the approval of the Competent Authority. This clarity will help employees better understand financial planning and retirement security.
Understanding Pension and Gratuity Benefits
The government has identified two important categories for pension and gratuity based on length of service:
On Completion of 10 Years of Service
Government employees who are compulsorily retired after completing 10 years of eligible service will be entitled to a Compulsory Retirement Pension. This pension will be a part of the superannuation pension, and its percentage will be determined by the competent authority. This simply means that the final pension amount will be determined based on both the length of service and the authority’s approval.
Not Completing 10 Years of Service
Employees who compulsorily retire before completing 10 years of service will receive a service gratuity instead of a pension. This gratuity will also be a percentage of the superannuation pension and will only be released after the approval of the competent authority. The government has clarified that the final decision in both cases will rest with the relevant authority.
Strict Instructions to All Ministries
The government has directed all ministries and departments to make these provisions known to every employee to avoid any confusion. Employees must understand that there is a significant difference in the benefits they receive before and after completing 10 years of service. Employees who have completed 10 years of service are advised to consult with pension officials in advance to understand their retirement benefits.
The government states that this update will help employees better understand their financial planning and retirement security. This clarity removes any misunderstandings regarding pension and gratuity in the event of compulsory retirement and ensures transparency. This assurance is in the best interest of employees.