The Central Government of India recently made a significant change in pension rules for its employees if they go missing during their service period. The families of missing Central government employees covered under the National Pension System (NPS) are now entitled to receive a family pension, salary arrear, leave encashment and retirement gratuity.
Ajit Kumar, Chief Strategy Officer, KFintech, says, “It will benefit the families of Central Government employees, especially those posted in violence-affected areas such as Jammu and Kashmir, North-eastern regions and Naxalite-prone areas.”
A missing Central government employee’s family will immediately get family pension benefits.
Kumar explains, “To date, the Central government employees covered by CCS pension rules 1972 used to get the same benefits if they went missing during their service. As per the new Office Memorandum (OM) dated 28th April 2022, the said benefits will be extended to the family of a missing Central government employee covered under NPS.”
He further adds, “It will allow the family of the employees to get the pension benefits without having to wait for the government to declare the missing employee dead or wait for seven years to get the benefits.”
However, for the period the family of the missing employees gets a pension or until the government declares him/her dead, the NPS account and respective PRAN (Permanent Retirement Account Number) will be suspended.
Kumar points out, “if the missing government servant re-appears and re-joins the service, the amount paid as a pension to their family during the missing period will be deducted from the salary. In this case, the NPS account against his/her name will be reactivated so is the PRAN number.” Note that the benefits available to the families of mission central government employees are subject to conditions and procedural requirements.
On the other hand, experts say if the government declares the mission employee dead after seven years, the accumulated corpus in the NPS account from government contribution and its returns will be transferred to the government account. The remaining amount, including the employee contribution and the return, will go to the nominee or legal heir.
The Benefits of NPS
Following are the top benefits of NPS:
- The National Pension System offers various investment options to investors and allows them to choose their preferred pension fund. They can also monitor the growth of their pension corpus.
- Operating an NPS account is straightforward as you will get a unique PRAN number against your account, and it remains the same throughout your life. Kumar adds, “One can also switch from one investment fund to another up to 2 times during one’s life.”
- Indian citizens from the age of 18 to 65 years from any job sector are eligible to open an NPS account.
- The maintenance cost of the NPS account, Kumar says, “is low and the return it promises is higher than most retirement planning schemes.”
- The amount paid towards NPS investments is eligible for tax benefits under sections 80C and 80CCD.
Hence, while the National Pension System (NPS) offers financial independence and security during the retirement age of the subscribers, “the benefits will be transferred to the subscriber’s family in case he/she goes missing during the service years,” adds Kumar.