The central government has taken a major step to address long-standing confusion regarding government employees’ pensions. The Ministry of Personnel, Public Grievances and Pensions (DoPPW) has issued a new order clarifying that pension and family pension will now be calculated based on an employee’s last working day. Whether the employee retires, quits, is removed from service, or dies, the rules applicable on that day will apply to pension determination. This move aims to ensure transparency and uniformity in pension determination.

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There will no longer be any ambiguity in pension determination

The new provision has come into effect under Rule 5 of the CCS (Pension) Rules, 2021. Previously, many departments used to have disputes about what constituted the last working day, leading to delays and errors in the pension process. Now, the government has clarified in its order that the rules applicable at the time of an employee’s retirement or death will apply to their pension.

Service will not be broken even if on leave or suspension

Questions have often arisen as to whether retirement during leave or suspension will be considered a break in service. The government has clarified that if an employee is on leave, absenteeism, or suspended before retirement, those days will still be considered part of the service period. This means that pension calculations will continue as usual and will not be considered an interruption in the employee’s service.

Family Pension

Parents of government employees who die while in service and do not have a spouse or children will now receive a family pension for life. This provision has been implemented under the CCS (Extraordinary Pension) Rules, 2023. However, for security and to keep records updated, the government has made it mandatory for both parents to submit separate life certificates every year to avoid erroneous payments.

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Government Objectives and Impact

The government states that this change will simplify, expedite, and make the pension determination process transparent. Previously, misinterpretation of rules and departmental differences caused significant delays in pension matters. The new order will not only expedite pension processing but also ensure that employees and their families receive timely and appropriate benefits, whether on leave, under suspension, or in a family pension case.