In a major update for central government employees, the Centre has released certain guidelines for contributions to the National Pension System (NPS). The Department of Pension and Pensioners’ Welfare, which comes under the Ministry of Personnel, Public Grievances and Pensions, has shared an Office Memorandum, dated October 7, 2024, outlining details about the changes in rules pertaining to employees’ NPS contributions.
The guidelines also reiterated certain existing provisions, including the requirement of 10% contribution from monthly salary to the NPS. This contribution is subject to periodic review, but the amount will always be rounded up to the nearest whole rupee, the memorandum said.
NPS contributions during periods of suspension
It, however, specified that during periods of suspension, employees may choose to continue their contributions. If a suspension is later deemed as duty, contributions will be recalculated based on the employee’s salary during that time.
Any discrepancies in contributions will be credited to the individual’s pension account along with applicable interest, it added.
While absent without pay or on unpaid leave, employees will not be required to contribute, as per the guidelines issued through the Office Memorandum.
Furthermore, those on deputation to other departments or organizations will still contribute to the NPS based on their salary, as if they had not been transferred, the rules specified.
Employees on probation must make contributions to NPS
Employees on probation are also obligated to make contributions to the NPS since the aim is to ensure that their pension savings start as early as possible.
The process for managing these contributions includes monthly deductions from salaries, which must be submitted by the Drawing and Disbursing Officer. The Pay and Accounts Officer will compile the contributions and send them to the Trustee Bank by the end of each month, with specific timelines set for the month of March, the memorandum said.
In cases of delays in crediting contributions, the affected employees will receive their contributions along with interest for any delay, ensuring that their pension accounts are accurately maintained, according to the Office Memorandum.
All ministries and departments have been urged by the DoPPW to communicate these new provisions to staff involved with NPS matters, ensuring strict adherence to the updated rules.
These new guidelines are aimed at streamlining the pension contribution process for Central Government employees and enhance the management of their retirement savings.