01 Nov, 2023 12:07p.m.

FinMin fixes remuneration of contractual Central Govt Employees retiring under NPS


In a significant development, the Department of Expenditure, part of the Ministry of Finance, has addressed the remuneration structure for contractually appointed Central Government employees who retire under the National Pension System (NPS).

As per the latest Office Memorandum dated 18th October 2023, the Department of Expenditure clarified that in the case of Central Government retirees under the NPS, their remuneration will be determined by deducting 30% of their last basic pay at the time of retirement from their final basic pay. The remaining amount after this deduction will constitute their fixed monthly remuneration.

This clarification is essential as it differentiates these NPS-retiring employees from those governed by the CCS (Pension) Rules of 2021. Under the NPS framework, the annuity is influenced by contributions made by both the Central Government and the employees during their service tenure, leading to a shared outcome. In contrast, under the CCS (Pension) Rules of 2021, the Central Government exclusively funds the entire pension.

This information aims to provide transparency and consistency in the remuneration process for Central Government employees on contract appointments who retire under the NPS.

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