An amount equivalent to 30% of the last basic pay as drawn at the time of retirement shall be deducted from the last basic pay and the resultant amount shall be the fixed monthly amount as remuneration in case of contractual central government employees who retire under NPS.
In an Office Memorandum dated 18th October 2023, the Department of Expenditure under the Ministry of Finance clarified the regulation of remuneration in case of contract appointment of Central Government Employees.
“…it has been decided that while fixing remuneration in such cases in case of Central Government retirees under the NPS, an amount equivalent to 30% of the last basic pay as drawn at the time of retirement shall be deducted from the last basic pay and the resultant amount shall be the fixed monthly amount as remuneration,” the DoE said.
The DoE considered the question of fixation of remuneration in respect of those central Government employees who retire under the National Pension System (NPS), consequent upon their appointment on a contract basis.
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It said the case of such employees is altogether different from those governed by the CCS(Pension) Rules, 2021, as in the case of former annuity is admissible, which is based on the pension corpus accumulated at the time of retirement on the basis of contributions made by the Central Government and the employees during the service span of these employees.
Therefore, annuity drawn by such employees is an outcome of contributions made by both the Central Government and the employees, unlike the case of those retiring under the CCS(Pension) Rules, 2021 where the entire pension is paid by the Central Government, the DoE said.
