Judicial Proceedings Will Affect Assured Payout Under Unified Pension Scheme

The Department of Pension and Pensioners’ Welfare (DoPPW) has issued an Office Memorandum (No. 57/03/2022-P&PW(B)/8361(10)) clarifying how pending departmental or judicial proceedings at the time of retirement will impact the Assured Payout under the Unified Pension Scheme (UPS), which is implemented under the National Pension System (NPS).

Assured Payout Withheld in Case of Pending Proceedings

As per Rule 22 of the Central Civil Services (Implementation of Unified Pension Scheme under NPS) Rules, 2025, if a departmental or judicial proceeding is instituted while the employee is in service but remains unresolved at retirement, the retiring government servant will be entitled only to the accumulated pension wealth (individual corpus) in lump sum.
However, such a retiree will not receive the assured payout from the Unified Pension Scheme until the proceedings are concluded.

No Impact for Proceedings Initiated After Retirement

The memorandum specifies that if departmental proceedings are initiated under Rule 16 of the CCS (CCA) Rules, 1965 while the government servant was in service and continue after retirement, or if judicial proceedings are initiated after retirement, these will not affect the assured payout. The payout will be made in accordance with the PFRDA (Operationalisation of UPS under NPS) Regulations, 2025.

Rules for Continued Proceedings and Exoneration

Continuation after retirement: Pending departmental proceedings at the time of retirement will continue as per Rule 5 of the CCS (Payment of Gratuity under NPS) Rules, 2021, by the same authority that initiated them.
If exonerated: When the government servant is fully cleared of all charges, they can opt to receive the assured payout based on the notional value of their corpus and benchmark corpus at retirement.
- To do so, they must deposit at least 40% of the benchmark corpus, with interest, similar to Public Provident Fund (PPF) norms.
- Arrears of the assured payout will be released with applicable interest from the date of retirement.

Provisions in Case of Death

If a government servant dies during the pendency of departmental or judicial proceedings after retirement:

The legally wedded spouse at the time of retirement can opt for the assured payout, following the same procedure of depositing at least 40% of the benchmark corpus.
The payout will accrue from the date of retirement, with arrears and interest calculated as per PPF norms.
If both the subscriber and spouse die before receiving dues, the legal heirs will receive the accumulated pension wealth or arrears.

Other Retirement Benefits Remain Unaffected

The DoPPW clarified that these provisions do not impact other retirement benefits like gratuity, which will continue to be governed by their respective rules.

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