The Department of Pension and Pensioners’ Welfare (DoPPW) last year announced a 25% increase in the gratuity limit payable on retirement for central government employees after the dearness allowance (DA) was hiked to 50%. Post DA hike, the gratuity limit was enhanced from Rs 20 lakh to Rs 25 lakh for government employees, effective January 1, 2024.
A notification was issued on May 30 last year enhancing the gratuity limit for central government employees to Rs 25 lakh. As per norms, all allowances get revised upwards by 25% on DA reaching 50% of the basic pay for central government employees.
Will government employees get a gratuity benefit under UPS?
The Centre is going to roll out a new pension plan, ‘Unified Pension Scheme (UPS)’, from April 1, 2025. The UPS, which guarantees a minimum pension of Rs 10,000 for those government employees who serve for at least 10 years and a fixed pension for those who complete their entire service tenure, blends features of the Old Pension Scheme and the National Pension System (NPS).
In Parliament recently, the government was asked if the gratuity is admissible under the Unified Pension Scheme, as in the case of the Old Pension Scheme (OPS) and the New Pension Scheme (NPS).
Also read: Central govt employees to get 3 DA installments frozen during pandemic?
In its reply, the finance ministry said that the UPS being an option under NPS, “gratuity is payable in terms of Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021…”
One question was asked about the eligibility of employees for an assured payout in case of voluntary retirement from the service.
Rajya Sabha MP Javel Ali Khan asked whether, as per the Gazette Notification of the Ministry dated 24th January, 2025, under UPS, in cases of voluntary retirement after a minimum 25 years of qualifying service, assured payout will be commenced from the date on which the employee would have superannuated, if he had continued in service.
Responding to this, Minister of State for Finance Pankaj Chaudhary said that UPS, being a fund-based Pension System, relies on the regular and timely accumulation and investment of applicable contribution from both the employee and employer for assured payouts to the employees.
“Accordingly,
» Read More
