Government Contribution to NPS for Central Employees: Key Highlights

The Ministry of Personnel, Public Grievances, and Pensions has issued an Office Memorandum detailing the contribution by the Government of India towards the National Pension System (NPS) for Central Government employees. This memorandum, dated October 7, 2024, outlines the regulations and conditions under which contributions will be made to the NPS accounts of Central Government employees. Below are the key takeaways from the memorandum.

Also read: Contributions by Government Employees in National Pension System (NPS): Key Guidelines

NPS Contribution Rate

According to Rule 7 of the Central Civil Services (Implementation of National Pension System) Rules, 2021, the Government shall contribute 14% of the emoluments of a Government employee to their Individual Pension Account every month. This rate is fixed but may change from time to time if notified by the Government. The contribution amount will be rounded up to the nearest rupee to ensure the accuracy of monthly contributions.

Contribution Conditions During Leave

No contribution will be made by the Government during periods when a Government employee is not required to make contributions under the rules. However, if the leave granted is due to specific reasons, such as:

Medical grounds,
Inability to join or rejoin duty due to civil commotion, or
Pursuing higher studies considered beneficial for official duties,

the Government shall make contributions at the notional emoluments rate of 14% or as notified. Contributions during such periods will be calculated based on the emoluments that would have been payable, considering pay and dearness allowance.

Contribution During Suspension

When a Government employee is under suspension, contributions are managed differently:

Contributions shall be made based on the subsistence allowance paid during the suspension.
No contributions will be made if the employee has opted not to pay their contributions during suspension.
If the employee is reinstated, and the period of suspension is treated as duty or leave, contributions will be recalculated based on the emoluments due during that period. Any difference between the contributions already made and the correct amount will be credited to the employee’s account, including interest as per Public Provident Fund (PPF) rates.
If, after the conclusion of an inquiry, the period under suspension is treated as duty or leave, the contributions to the NPS will be determined based on the emoluments payable during the suspension period. Any difference between the contributions deposited and those due will be credited to the employee’s account with interest.

Contribution During Foreign Service

For employees on foreign service within or outside India, including deputation to international organizations like United Nations, IMF, World Bank, or Asian Development Bank, contributions will follow the orders issued by the Department of Personnel and Training and any procedures set by the authority regulating NPS.

Timelines for Contribution Remittance

The timelines for contribution by the Government will follow the same rules as contributions made by the Subscriber. If there is any delay in crediting contributions beyond the prescribed period due to reasons not attributable to the Subscriber, the delayed amount will be credited to the Individual Pension Account along with interest for the delayed period.

Contribution During Delays

If there is a delay in crediting contributions to the Individual Pension Account of the Subscriber due to factors beyond the Subscriber’s control, the amount shall be credited along with interest for the delayed period. The rate of interest will be determined in accordance with Rule 8 of the Central Civil Services (Implementation of National Pension System) Rules, 2021.

Strict Implementation Required

All Ministries/Departments have been requested to ensure that the provisions of this memorandum are strictly implemented and that the information is communicated to personnel handling NPS matters within the respective Ministry/Department, including attached and subordinate offices.

Also read: Contributions by Government Employees in National Pension System (NPS): Key Guidelines

View the original OM issued by DoPPW