Contract for Old Pension Scheme

Contract for Old Pension Scheme | Pension Solutions

Office Memorandum No. 57/04/2019-P&PW(B) dated 17th February, 2020

“Where the results for recruitment were declared before 01.01.2004 against vacancies occurring on or before 31.12.2003, the candidates declared successful for recruitment shall be eligible for coverage under the Central Civil Services (Pension) Rules, 1972”.

National Pension System (NPS) was introduced for Central Government employees by a Notification of Ministry of Finance (Department of Economic Affairs) dated 22nd December, 2003. NPS is mandatory for all new recruits to the Central Government service from 1st January, 2004 (except the armed forces). However, in some specific court cases, like WP(C) No. 3834/2013 titled Permanand Yadav Vs. Union of India and WP(C) No. 2810/2016 viz.Rajendra Singh Vs. Union of India, where the selection of candidates had been made before 01.01.2004 but their actual appointment in the Government service could be made on or after 01.01.2004 due to various reasons, on the direction of the Hon’ble High Court of Delhi, the benefit of Old Pension Scheme was allowed to the petitioners.

After considering all the relevant aspects and to extend the benefit to similarly placed Government servants in order to reduce further litigation, the Government has decided, vide an Office Memorandum No. 57/04/2019-P&PW(B) dated 17th February, 2020 of the Department of Pension & Pensioners’ Welfare, that in all cases where the results for recruitment were declared before 01.01.2004 against vacancies occurring on or before 31.12.2003, the candidates declared successful for recruitment shall be eligible for coverage under the Central Civil Services (Pension) Rules, 1972.
Accordingly, such Government servants who were declared successful for recruitment in the results declared on or before 31.12.2003 against vacancies occurring before 01.01.2004 and covered under the National Pension System on joining service on or after 01.01.2004, may be given a one – time option to be covered under the Central Civil Services (Pension) Rules, 1972.

The advertisements issued before the introduction of the National Pension System may or may not have contained a clause regarding the pension scheme applicable to the selected candidates. In its order dated 27.03.2019 in W.P.(C) 10306/2016 – Union of India & others versus Dr. Narayan Rao Battu & another, Hon’ble High Court of Delhi observed that since the new pension scheme was in effect and a policy decision had already been taken to make the said scheme applicable to all incumbents joining government service on or after 01.01.2004, the Respondent, who was appointed on 25.02.2005, cannot claim the right to be covered by the old pension scheme, merely because the vacancy against which he was appointed was initially advertised at a time when the old pension scheme was in force.

Hon’ble Court also observed that once the new pension scheme unambiguously and specifically provided that since all incoming office bearers, whose date of appointment is on or after 01.01.2004, would be governed by the new pension scheme, no reference can be made to either the date of vacancy, or the date of advertisement.

In view of the specific provisions of the Notification dated 22.12.2003, the date of advertisement for the vacancies or the date of examination for selection against those vacancies is not considered relevant for determining the eligibility for coverage under the Old Pension Scheme or the National Pension System. There is no proposal to revise the orders issued vide aforesaid Office Memorandum dated 17.02.2020.

This information was given by the Union Minister of State (Independent Charge), Development of North Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, Dr Jitendra Singh in a written reply in Rajya Sabha today.

Source: PIB

What is the Old Pension Scheme?

The Old Pension Scheme refers to a retirement benefits system that was applicable to government employees who joined the service before a certain date, following specific rules and regulations.

Who is eligible for the Old Pension Scheme?

Government employees who joined the service before a certain cutoff date are eligible for the Old Pension Scheme.

Can employees opt for the Old Pension Scheme if they joined after the cutoff date?

No, employees who joined the service after the specified cutoff date are not eligible for the Old Pension Scheme. They are usually enrolled in a different retirement benefits system.

What does the Old Pension Scheme entail?

The Old Pension Scheme entails a defined benefit pension plan, where employees receive a fixed monthly pension amount based on their years of service and salary.

What is a defined benefit pension plan?

A defined benefit pension plan guarantees a specific amount of income stream during retirement, based on factors such as years of service, salary, and age at retirement.

Can employees contribute to the Old Pension Scheme?

Yes, under the Old Pension Scheme, employees are required to contribute a portion of their salary towards their pension fund.

Can employees withdraw their pension fund before retirement?

In most cases, employees cannot withdraw their pension fund prematurely. The fund remains locked until their retirement, and they start receiving regular pension payments.

Is the Old Pension Scheme still in effect?

The Old Pension Scheme may still be in effect for government employees who joined the service before the specified cutoff date. However, it is advised to consult the relevant authorities for accurate and up-to-date information.

Are there any changes to the Old Pension Scheme?

There may have been modifications or amendments to the Old Pension Scheme over the years. It is recommended to review the specific terms and conditions governing the scheme to understand any changes.

What happens if an employee switches jobs within the government sector?

In most cases, if an employee switches jobs within the government sector, their pension benefits under the Old Pension Scheme can be transferred to their new position, subject to relevant rules and procedures.