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NPS and OPS: Central govt employees can switch from NPS to old pension scheme in these conditions

Central government employees covered by NPS will have the option to switch to the benefits of the old pension scheme in the event of death or disablement. The Department of Pension and Pensioners’ Welfare (DoPPW) issued an office memorandum on October 26, 2022, detailing the options that central government employees can exercise under the Central Civil Service (Implementation of National Pension System) Rules, 2021.

“Rule 10 of these rules deals with the option to be exercised by every Central Government employee covered under the National Pension System for availing benefits under National Pension System or old pension scheme in the event of death of Government servant during service or his discharge on the ground of invalidation or disablement,” the DoPPW memorandum stated.

“In accordance with rule 10 of the Central Civil Services (Implementation of National Pension System) Rules, 2021, every Government servant covered under the National Pension System shall, at the time of joining Government service, exercise an option in Form-1 for availing benefits under the National Pension System or under the Central Civil Service (Pension) Rules or the Central Civil Service (Extraordinary Pension) Rules in the event of his death or boarding out on account of disablement or retirement on invalidation,” states the DoPPW office memorandum. Central government employees who are already covered by the NPS can also exercise such option, it added.

What is the option a central government employee can exercise?
A central government employee covered under the National Pension System (NPS), can choose between the benefits under NPS and those available under the old pension scheme by selecting the appropriate option in Form 1 and send the forms (Form 1 and Form 2) to the head of the office. The relevant head office will accept the option chosen by the central government employee after verifying all the facts submitted by the employee. The head office will forward a copy of the option exercised by the employee, to the Central Recordkeeping Agency through the drawing and disbursing officer and the pay and accounts officer for their record. The pay and accounts officer will make an entry in the online system regarding the option selected by the central government employee.

Along with Form 1, the central government employees will have to submit Form 2 which contains the details of the employee’s family to the relevant head office. Once the head office receives Form 2, it will acknowledge it and sign it and paste it into the service book of the employee. “The Head of Office on receipt of communication from the Government servant regarding any change in the size of the family shall also incorporate such a change in Form 2,” the office memorandum said.

How many times can a central govt employee revise his or her option?
Do note that a central government employee can revise his or her option as many times as he or she wants before retirement. He or she has to send a fresh application to the head of the office. Once the application is received, the head of office and pay and accounts officer will take further action as mentioned.

In case of death of the employee while in service
“In the case of death of a subscriber while in service, the last option exercised by the deceased subscriber before his death shall be treated as final and the family shall have no right to revise the option,” the DoPPW said.

What happens if an employee does not exercise an option and dies
If an employee does not exercise an option and dies before completion of service of fifteen years or within three years of the notification of Central Civil Services (Implementation of National Pension System) Rules, 2021, his family will be granted family pension in accordance with the provisions of the Central Civil Services (Pension) Rules or the Central Civil Services (Extraordinary Pension) Rules, as the case may be, as a default option, the office memorandum added.


In case of disablement
A subscriber who is discharged on invalidation or disability will get an opportunity to submit a fresh option at the time of such discharge. Where such a subscriber does not exercise a fresh option or is not in a position to exercise the fresh option at the time of discharge, the option already exercised by the subscriber will become operative.

Where a subscriber is discharged from government service on invalidation or disability before completion of service of fifteen years or within three years of the notification of these rules without exercising an option, and is also not in a position to exercise an option at the time of discharge, he or she will be granted invalid pension or disability pension in accordance with the provisions of the Central Civil Services (Pension) Rules or the Central Civil Services (Extraordinary Pension) Rules as the case may be, as default option, said DoPPW.

In case an employee has not selected an option
“In all other cases, where no option was exercised by the subscriber, the claim of the subscriber on discharge from the service and that of the family on the death of the subscriber, shall be regulated in accordance with the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under National Pension System) Regulations, 2015, as default option,” said the regulatory body.

“In cases where the option exercised by the deceased subscriber or the default option for benefit under the Central Civil Services (Pension) Rules or the Central Civil Services (Extraordinary Pension) Rules becomes infructuous on account of non-availability of an eligible member of the family for grant of family pension under the Central Civil Services (Pension) Rules or the Central Civil Services (Extraordinary Pension) Rules, such option would be deemed to have become invalid and the benefits admissible under the National Pension System shall be granted to the legal heir(s) of the employee in accordance with the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under National Pension System) Regulations, 2015.” it further added.


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