All You Need To Know About Payment of Gratuity Under National Pension System

The Department of Pension and Pensioners' Welfare (DoPPW) under the Ministry of Personnel, Public Grievances and Pensions has released a regulation known as the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021. According to the notification of DoPPW, these rules shall apply to the Government servants including civilian Government servants in the Defence Services, appointed substantively to civil services and posts in connection with the affairs of the Union on or after the 1st day of January 2004, and to whom the Central Civil Services (Implementation of National Pension System) Rules, 2021 apply.

Payment of gratuity shall be made in accordance with the Central Civil Services (Implementation of National Pension System) Rules, 2021, in the case of a Government servant who dies while on duty, is boarded out due to disability, or retires due to invalidation, and who had exercised the option under rule 10 of the Central Civil Services (Implementation of National Pension System) Rules, 2021 for benefits under the Central Civil Services (Pension) Rules, 1972, or the Central Civil Services (Extraordinary Pension) Rules, 1939.

The regulation of claims to gratuity is as follows according to the notification issued by the department.

Any claim to gratuity shall be regulated by the provisions of these rules in force at the time when a Government servant retired or is retired or is discharged or is allowed to resign from service or dies, as the case may be. The day on which a Government servant retires or is retired or is discharged or is allowed to resign from service, as the case may be, shall be treated as his last working day and the date of death of a Government servant shall also be treated as a working day.

For the purpose of determining the amount of gratuity payable under these rules shall include the basic pay as defined in rule 9 (21) (a) (i) of the Fundamental Rules, 1922, which a Government servant was receiving immediately before his retirement or on the date of his death and shall also include non-practicing allowance granted to the medical officer in lieu of private practice.

The amount of retirement gratuity or death gratuity payable under this rule shall in no case exceed twenty lakh rupees.

Average emoluments shall be determined with reference to the emoluments drawn by a Government servant during the last ten months of his service. The dearness allowance admissible on the date of retirement or death, as the case may be, shall also be treated as emoluments for the purpose of this rule.

The retirement gratuity or death gratuity for a Government servant, who has completed five years' qualifying service shall be equal to one-fourth of his emoluments for each completed six monthly periods of qualifying service, subject to a maximum of 16½ times the emoluments.

Where a Government servant dies while in service, the death gratuity shall be payable to his family in the manner indicated in sub-rule (1) of rule 24 at the rates given in two times of emoluments if the period of qualifying service is less than one year, six times of emoluments if the period of qualifying service is one year or more but less than five years, twelve times of emoluments if the period of qualifying service is five years or more but less than eleven years, twenty times of emoluments if the period of qualifying service is eleven years or more but less than twenty years and half of the emoluments for every completed six monthly periods of qualifying service subject to a maximum of thirty-three times of emoluments if the period of qualifying service is 20 years or more.

Retires on attaining the age of superannuation, or on invalidation, or retires or is retired, in advance of the age of superannuation, on being declared surplus to the establishment in which he was serving, opts for Special Voluntary Retirement Scheme relating to voluntary retirement of surplus employees, or on has been permitted to be absorbed in service or post in or under a Corporation or Company wholly or substantially owned or controlled by the Central Government or a State Government or in or under a body controlled or financed by the Central Government or a State Government are eligible for retirement gratuity or death gratuity.

The right conferred on any specified nominee who predeceases the Government servant or dies after the death of the Government servant but before receiving the payment of gratuity shall transfer to such other person as may be indicated in the nomination.

The retirement gratuity shall be paid to the family within three months of the date of application and in case of any delay, the interest shall be paid at the applicable Public Provident Fund rates, and responsibility for delay shall be fixed in accordance with rule 44.

In all cases where the payment of gratuity has been authorized later than the date when its payment becomes due, including the cases of retirement otherwise than on superannuation, and it is clearly established that the delay in payment was attributable to administrative reasons or lapses, interest shall be paid at the rate and manner applicable to Public Provident Fund amount in accordance with the instructions issued from time to time.