Central Civil Services (Pension) Rules, 1972 for central govt employees appointed before Jan 1, 2004 but joined service on or after January 1, 2004
The central government has given an opportunity to those employees who were appointed before January 1, 2004 but joined service on or after January 1, 2004 to get covered under the Central Civil Services (Pension) Rules, 1972 instead of the NPS (National Pension System).
The last date to exercise this option of switching over to the pension scheme is May 31, 2020 and if an employee fails to exercise the option by this stipulated date, they will continue to be covered under NPS.
In NPS the pension would depend on the total corpus accumulated at the time of retirement/maturity of the account. The benefit in the previous pension system of the central government (as per Central Civil Services (Pension) Rules, 1972) is that the pension is pre-fixed on the basis of last pay drawn or average emoluments (for last 10 months), whichever is more beneficial to the retiree. Dearness allowance is also payable to keep up with inflation.
In a press release, The Department of Pension and Pensioners’ Welfare has stated that all central government employees whose selection for appointment was finalised before January 1, 2004, but who joined service on or after January 1, 2004, can now opt to be covered under the Central Civil Services (Pension) Rules, 1972 instead of the NPS.
As per Jitendra Singh, minister of state for the Ministry of Personnel, Public Grievances and Pensions, the order effectively gives those employees of the Government of India who were recruited before 2004 the option of either switching over to the CCS (Pension) Rules, 1972 or continue to be covered under the NPS.
Singh further added, “The Department of Pensions and Pensioners’ Welfare had taken the decision to address the longstanding demand of Central Government employees whose recruitment was finalised before January 1, 2004, but who had, for various reasons, joined the services on or after January 1, 2004. However, he said that the last date to exercise this option would be May 31, 2020, and those who fail to exercise the option by this stipulated date would continue to be covered by the National Pension System.”
The central government by this order has rectified a long-standing grievance of a huge number of employees whose recruitment (including written examination, interview and declaration of result) had been finalised on or before January 1, 2004 (which was the cut-off date for employees to be covered under the old Pension scheme) but whose joining was delayed on account of administrative reasons, where the delay was beyond the control of such Government servants, as per the press release.
This order of the government is expected to give relief to several central government employees, some of whom were knocking the doors of the courts in order to get covered under the CCS (Pension) Rules, 1972 and will also substantially bring down the litigation on this subject matter.
The matter regarding coverage under the CCS (Pension) Rules, 1972 based on the option exercised by the government servant shall be placed before the appointing authority for consideration in accordance with these instructions. In case the Government servant fulfils the conditions for coverage under the CCS (Pension) Rules, 1972, in accordance with the instructions, necessary order in this regard shall be issued latest by September 30, 2020. The NPS accounts of such Government servants shall, consequently, be closed w.e.f. November 1, 2020, as per the release published on PIB website.
The government servants who exercise the option to switch over to the pension scheme under CCS (Pension) Rules, 1972, shall be required to subscribe to the General Provident Fund (GPF).