MINISTRY OF FINANCE (Department of Financial Services) NOTIFICATION
New Delhi,
the 24th January, 2025 F. No. FX-1/3/2024-PR.-
In partial modification of the
Ministry of Finance (Department of Economic Affairs) Notification No. F. No.
5/7/2003 - ECB& PR dated 22nd December 2003 and Ministry of Finance (Department
of Financial Services) Notification No. F. No. 1 / 3 / 2016 - PR dated 31st
January, 2019, the Central Government has decided to introduce Unified Pension
Scheme, as an option under the National Pension System for the employees of the
Central Government who are covered under the National Pension System. 2. The
Unified Pension Scheme shall be applicable to such Central Government employees
who are covered under National Pension System and who choose this option under
National Pension System. It will have the following features, namely: -
Eligibility under the Scheme (i) Assured Payout shall be available only in the
following cases, namely: - (a) in case of an employee superannuating after
qualifying service of ten years, from the date of superannuation; (b) in case of
the Government retiring an employee under the provisions of FR 56 (j) (which is
not a (ii) THE GAZETTE OF INDIA: EXTRAORDINARY [PART I―SEC.1] penalty under
Central Civil Services (Classification, Control and Appeal) Rules, 1965) from
the date of such retirement, and (c) in case of voluntary retirement after a
minimum qualifying service period of 25 years, from the date such employee would
have superannuated, if the service period had continued to superannuation.
Assured Payout shall not be available in case of removal or dismissal from
service or resignation of the employee. In such cases, the Unified Pension
Scheme option shall not apply. Benefits under the Scheme (iii) (iv) (A) (vi)
(vii) (viii) (ix) (x) (xi) (xii) Subject to other conditions stated in this
notification. Assured Payout under the scheme shall be as follows, namely:- (a)
the rate of full assured payout will be @50% of twelve monthly average basic
pay, immediately prior to superannuation. Full assured payout is payable after a
minimum 25 years of qualifying service; (b) in case of lesser qualifying service
period, proportionate payout would be admissible, (c) a minimum guaranteed
payout of Rs. 10,000 per month shall be assured in case superannuation is after
ten years or more of qualifying service; and (d) in cases of voluntary
retirement after a minimum 25 years of qualifying service, assured payout will
commence from the date on which the employee would have superannuated, if he had
continued in service. In case of death of the payout holder after
superannuation, family payout @60% of the payout admissible to the payout
holder, immediately before his demise, will be assured to the legally wedded
spouse (spouse legally wedded as on the date of superannuation or on the date of
voluntary retirement or retirement under FR 56(j), as may be applicable).
Dearness Relief will be available on the assured payout and family payout, as
the case may be. The Dearness Relief will be worked out in the same manner as
Dearness Allowance applicable to serving employees. Dearness Relief will be
payable only when pay out commences. A lump sum payment will be allowed on
superannuation 10% of monthly emoluments (basic pay + Dearness Allowance) for
every completed six months of qualifying service. This lump sum payment will not
affect the quantum of assured payout The corpus under the Unified Pension Scheme
option will comprise of two funds, namely - (a) An individual corpus with
employee contribution and matching Central Government contribution; and (b) A
pool corpus with additional Central Government contribution The contribution of
employees will be 10% of (basic pay + Dearness Allowance). The matching Central
Government contribution will also be 10% of (basic pay Dearness Allowance). Both
will be credited to each employee's individual corpus. Central Government shall
provide an additional contribution of an estimated 8.5% of (basic pay + Dearness
Allowance) of all employees who have chosen the Unified Pension Scheme option,
to the pool corpus on an aggregate basis. The additional contribution is for
supporting assured payouts under the Unified Pension Scheme option. The employee
can exercise investment choices for the individual corpus alone. Such investment
choices shall be regulated by the Pension Fund Regulatory and Development
Authority. A 'default pattem' of investment may be defined by Pension Fund
Regulatory and Development Authority from time to time. If an employee does not
exercise an investment choice on individual corpus, the 'default pattern" of
investment will apply. The investment decisions for the pool corpus built
through the additional Central Government contribution will solely rest with
Central Government In respect of employees who have retired before the date of
operation of Unified Pension Scheme and who opt for the Unified Pension Scheme
option, Pension Fund Regulatory and Development Authority will determine the
mechanism for making available the top-up amount. Explanation: For the purpose
of this notification basic pay includes non-practicing allowance granted to
medical officer in lieu of private practice.
The existing Central Government
Employees under National Pension System, on the effective date of
operationalisation of the Unified Pension Scheme option, as well as the future
employees of Central Government can choose to either take the Unified Pension
Scheme option under the National Pension System or continue with the National
Pension System without the Unified Pension Scheme option. In case an employee
chooses the Unified Pension Scheme option, all its stipulations and conditions
shall be deemed to have been opted for and such option once exercised, shall be
final. 11 Once an employee covered under National Pension System, who is in
service on the effective date of operationalisation of the Unified Pension
Scheme option, exercises the Unified Pension Scheme option, the outstanding
National Pension System corpus in the employees Permanent Retirement Account
Number shall be transferred to the employee's individual corpus under the
Unified Pension Scheme. For each employee covered under National Pension System
who has exercised the Unified Pension Scheme option, a 'benchmark corpus' value
shall be computed, in such manner as may be determined by the Pension Fund
Regulatory and Development Authority, with the following assumptions, namely: -
(i) regular receipt of applicable contributions for both the employees and the
employer for each month of qualifying service; (ii) in case of missing
contributions, an appropriate value, to be determined by the Pension Fund
Regulatory and Development Authority, shall be assigned; and (i) investment of
such contributions is made as per the 'default pattern of investment, as defined
by the Pension Fund Regulatory and Development Authority.
The value or units in
the individual corpus with investment choices of the employee shall be informed
to such employee on a periodic basis. Alongside, the value or units of the
benchmark corpus corresponding to the employee, computed as per para 5 above
will also be informed to the employee. At superannuation or retirement, the
qualifying service of the employee under the Unified Pension Scheme option, will
be determined by the Head of Office, where he is employed. At superannuation or
retirement, the employee under Unified Pension Scheme shall authorise transfer
of the value or units in the individual corpus to the pool corpus, equivalent to
the value or units of the benchmark corpus for authorisation of Assured Payout.
In case the value or units of individual corpus is less than value or units of
the benchmark corpus, the employee will have an option to arrange for additional
contribution to meet this gap. In case the value or units of individual corpus
is more than the value or units of the benchmark corpus, the employee shall
authorise transfer of value or units equivalent to the benchmark corpus and the
balance amount in the individual corpus will be credited to the employee. In
case the values or units transferred by the employee from the individual corpus
to the pool corpus, is less than the value or units of the benchmark corpus,
payout proportionate to the assured payout shall be authorised. 10. The Unified
Pension Scheme, being a 'fund-based pension system, relies on the regular and
timely accumulation and investment of applicable contributions (from both the
employee and the employer) for Assured Payout to the employees. 11. For the sake
of clarity, it is made clear that any employee who has exercised the Unified
Pension Scheme option under National Pension System under this notification,
shall not be entitled for and cannot claim, any other policy concession, policy
change, financial benefit, any parity with subsequent retirees etc. later
including post- retirement. 12. The provisions of Unified Pension Scheme will
also be applicable, mutatis mutandis to past retirees of National Pension
System, who have superannuated before the date of operationalising of Unified
Pension Scheme. Such superannuated employees will be paid arrears for the past
period along with interest as per Public Provident Fund rates.
The monthly
top-up amount for such superannuated employees, to be determined by the Pension
Fund Regulatory and Development Authority, will be paid after adjusting the
withdrawals made by, and annuities paid to, them. 13. The provisions regarding
assured payout under the Unified Pension Scheme option for employees facing
disciplinary proceedings at the time of superannuation or where disciplinary
proceedings are contemplated post- retirement, shall be separately notified. 14.
Illustrative examples as to working of payouts of Unified Pension Scheme under
different scenarios are given in the Annexure. 15. Pension Fund Regulatory and
Development Authority may issue regulations for operationalising Unified Pension
Scheme. 16. The effective date for operationalisation of the Unified Pension
Scheme shall be 1st April, 2025.
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