Benefits available in the case of death of a Central Government Employee covered under National Pension System (NPS) during service

Death benefits for Central govenment employees covered under NPS during service

As you are aware that employees who have joined after 2004 in the government services are covered under NPS. in this post we have covered the death benefits for central government employees who dies during the service

Important Points:

1. Choice of Benefits:
   • Under Rule 10 of the CCS (Implementation of NPS) Rules, 2021, Central Government employees covered under NPS can choose between the old pension scheme benefits or their accumulated pension corpus under NPS in case of their death.
   • It is important to note that the family of a deceased Government employee cannot exercise this option.
2. Default Option:
   • If the employee does not specify their choice, the default option is the old pension scheme for the first 15 years of service. After 15 years, the default shifts to NPS benefits.
   • Currently, the old pension scheme remains the default option until March 2024, even if the employee has completed 15 years of service.

Benefits Available in Case of In-Service Death:

1. Family Pension:
   • As per the CCS (Pension) Rules, 1972, the family will receive a pension based on the employee’s option or the default option.
   • If the employee opted for NPS benefits, the family will receive the accumulated pension wealth.
2. Death Gratuity:
   • A lump sum payment is provided to the family.
3. Leave Encashment:
   • Payment for the unused leave at the time of death.
4. CGEGIS (Central Government Employees Group Insurance Scheme):
   • Insurance benefits provided to the family.
5. CGHS (Central Government Health Scheme) Facilities:
   • Continued health facilities for the family.

Procedures Based on Options:

1. Old Pension Scheme (or Default Option if No Choice Made):
   • The concerned office will sanction the family pension to eligible family members as per the old pension scheme.
   • The PRAN (Permanent Retirement Account Number) under NPS will be closed, and the government contribution, along with the returns, will be transferred back to the Government account. The remaining amount will be paid to the nominee or legal heir in a lump sum as per PFRDA regulations.
2. NPS Benefits (If Opted by Employee or Default After 15 Years):
   • The concerned office will close the PRAN under NPS and provide a lump sum (maximum of 20% of the accumulated pension wealth) and an annuity to the eligible family member from a PFRDA-registered annuity service provider.

Common Benefits in Both Cases:

• Death Gratuity
• Leave Encashment
• CGEGIS
• CGHS Facilities

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Source: DOPT