NPS Subscribers ATTENTION! Central govt makes BIG clarification over entitlement for employee's family, nominees

Central Government Employees NPS Gratuity Rate: The department said that the maximum amount of death gratuity payable shall in no case exceed Rs twenty lakh.

Government said that if there is no nomination or if the nomination made does not subsist, the amount will be paid to the legal heir of the subscriber.

Central government employees are a major part of the National Pension System (NPS). NPS is a voluntary retirement savings scheme that allows subscribers to make a defined contribution towards planned savings for post-retirement. PFRDA is the nodal agency for the implementation and monitoring of NPS. Recently, the central government issued a clarification with regard to NPS payment to family members or nominees in case of the death of a government servant. In an office memorandum dated October 28, the Department of Pension and Pensioner's Welfare under the Ministry of Personnel, Public Grievances and Pensions highlighted the provisions of Rule 20 of the Central Civil Services (Implementation of NPS) RUles, 2021 that provides for the entitlement of family members on the death of a central government employee.

"If on the death of the Subscriber, benefits are payable to the family under the Central Civil Services (Extraordinary Pension) Rules of the Central Civil Services (Pension) Rules, the Government contribution and return thereon in the accumulated pension corpus of the Subscriber shall be transferred to Government account. The remaining accumulated pension corpus shall be paid in a lump sum to the person(s) in whose favour a nomination has been made under the Pension Fund Regulatory and Development Authority (Exits and Withdrawals under National Pension System) Regulations, 2015," said the memo.

It added that if there is no nomination or if the nomination made does not subsist, the amount will be paid to the legal heir of the subscriber. The department further said that in case of the death of a subscriber who had exercised the option for availing benefits under the NPS, such benefits will be granted as per the PFRDA Regulations 2015.

"In the event of death of Government employees covered under NPS during service, and in whose case benefits from accumulated pension corpus under NPS have been availed, a family member of a such deceased government employee would also be eligible for death gratuity," said the department detailing the rates for the same.

The department said that the maximum amount of death gratuity payable shall in no case exceed Rs twenty lakh.