Effect of Pending Departmental or Judicial Proceedings on Assured Payout under Unified Pension Scheme (UPS)
The Department of Pension and Pensioners’ Welfare (DoPPW), under the Ministry of Personnel, Public Grievances and Pensions, has issued an important Office Memorandum (OM) dated 29th October 2025. This memorandum clarifies how pending departmental or judicial proceedings at the time of retirement will affect the Assured Payout under the Unified Pension Scheme (UPS) for Central Government employees covered under the National Pension System (NPS).
🔹 Background
The Government of India has introduced the Central Civil Services (Implementation of Unified Pension Scheme under the National Pension System) Rules, 2025, which govern the pension-related matters of Central Government employees who opt for UPS.
Rule 22 of these rules specifically deals with how disciplinary or court proceedings impact the Assured Payout under UPS.
🔹 Key Provisions Explained
1. When Proceedings Are Pending at the Time of Retirement
If a Central Government employee faces departmental or judicial proceedings that began while they were in service but remain unresolved at the time of retirement, such employees:
- Will receive only their accumulated pension wealth in a lump sum from their individual corpus under the UPS, as per PFRDA (Operationalisation of UPS under NPS) Regulations, 2025.
- Will not receive any Assured Payout until the proceedings conclude.
This means the government withholds the assured part of the pension until the employee is cleared of all charges.
2. Proceedings Started After Retirement
If the departmental proceedings are initiated under Rule 16 of CCS (CCA) Rules, 1965 and continued after retirement, or judicial proceedings begin after retirement, these will not affect the employee’s entitlement to the Assured Payout.
In such cases, the pension benefits will continue as per normal UPS provisions.
3. Proceedings After Retirement — How They Continue
If departmental proceedings are not concluded before retirement, they will be treated as proceedings under Rule 5 of the CCS (Payment of Gratuity under NPS) Rules, 2021.
Such cases will continue to be handled by the same authority as if the employee were still in service.
🔹 Entitlements After Exoneration or Death
(a) If the Employee Is Fully Exonerated
Once the employee is cleared of all charges, they can choose to receive the Assured Payout under UPS.
However, to activate this benefit, they must:
- Deposit at least 40% of the benchmark corpus (calculated at retirement) along with applicable interest (as per PPF rates).
- On doing so, they will receive arrears of assured payout with interest, effective from the date of retirement.
(b) If the Employee Dies During Proceedings
If the employee passes away during pending proceedings, their legally married spouse can opt for the Assured Payout.
The spouse will follow the same procedure — depositing 40% of the benchmark corpus with interest — and will receive all arrears and interest from the date of retirement.
(c) If Both Employee and Spouse Die
If both the retired employee and spouse die before receiving dues, the legal heirs will get the accumulated pension wealth or arrears of assured payout.
🔹 Other Retirement Benefits Unaffected
The above provisions apply only to the Assured Payout under UPS.
Other retirement benefits such as gratuity or leave encashment will continue to be governed by their respective rules and may still be subject to recovery or adjustment depending on the case.
🔹 Instructions to All Ministries and Departments
The OM instructs all Ministries, Departments, and attached/subordinate offices to strictly follow these provisions and ensure that officers handling UPS/NPS matters are made fully aware of the rules.
🧾 Summary Table
| Situation | Effect on Assured Payout under UPS |
|---|---|
| Departmental/Judicial proceedings pending at retirement | Assured payout withheld; only corpus paid |
| Proceedings started after retirement | No impact; assured payout continues |
| Employee exonerated after proceedings | Can opt for assured payout with interest and deposit |
| Employee dies during proceedings | Spouse can opt for assured payout with interest |
| Both employee and spouse die | Legal heirs receive corpus or arrears |
💬 Final Words
This clarification brings much-needed transparency for Central Government employees under the Unified Pension Scheme (UPS).
It ensures fairness — protecting government interests during pending proceedings while safeguarding employee and family rights once innocence is established.
Employees covered under the NPS who have opted for UPS should carefully understand these provisions, especially if any departmental or court cases are ongoing near retirement.
For more updates on pension rules and benefits, visit GovtJobPerks.com.