Railway Board Issues Clarification on NPS Benefits for Dismissed or Retired Railway Employees

The Railway Board has issued a directive (RBE No. 15/2025) clarifying the impact of compulsory retirement, dismissal, or removal from railway service on the accumulated pension corpus under the National Pension System (NPS).

Key Highlights of the Directive:

1. NPS Payouts in Case of Retirement or Dismissal:
   • If a railway servant covered under NPS is compulsorily retired, dismissed, or removed from service, the lump sum and annuity out of their accumulated pension corpus will be paid to them.
   • The disbursement will follow the Pension Fund Regulatory and Development Authority (PFRDA) regulations, which govern the exit of NPS subscribers before superannuation.
2. Option to Continue NPS Subscription:
   • A railway employee who is dismissed, removed, or retired compulsorily may continue their NPS account by subscribing as a non-Government subscriber under the same Permanent Retirement Account Number (PRAN) as per PFRDA guidelines.
3. Impact on Other Retirement Benefits:
   • The directive clarifies that these provisions do not affect other retirement benefits, such as gratuity and other admissible benefits, which will be regulated as per the applicable rules.

This clarification aligns with the New Pension Scheme (now NPS) introduced by the Ministry of Finance via notification dated December 22, 2003, which became mandatory for new recruits from January 1, 2004.

The Railway Board’s latest directive ensures that railway employees under NPS are aware of their financial entitlements in case of premature exit from service due to disciplinary actions or penalties.

View Railway Board’s letter

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