New NPS contribution rules and guidelines for central govt employees: Details

The government has notified new NPS (National Pension System) rules with updated contribution guidelines for leave and suspension which may increase retirement savings and pensions for central government employees, according to a Financial Express report.
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This comes after Finance Minister Nirmala Sitharaman proposed to increase the employer’s contribution to 14% of the base salary under the NPS for central government staff in the Union Budget 2024.
The Department of Pension and Pensioners’ Welfare (DoP&PW) has thus, notified the Central Civil Services (Implementation of National Pension System) Rules, 2021, in an October 07, 2024 memorandum, of new guidelines detailing the government’s contribution to NPS.
The central government will contribute 14% of the emoluments of each government employee to their individual pension account every month, according to Rule 7 of the Central Civil Services (Implementation of National Pension System) Rules, 2021.
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This amount will always be rounded off to the nearest higher rupee.
However, government contribution will not be made in periods when the employee is not required to contribute, except in certain specific cases.
For example, the government will contribute based on the employee’s emoluments during a medical leave or leave to pursue higher studies.
In cases of suspension, the contribution will be based on subsistence allowance paid to the employee.
If the suspension period is later classified as duty or leave or such a circumstance where salary is payable, then contributions will be adjusted accordingly.
In these situations, the contribution difference will get credited to the employee’s pension account along with interest, at rates which the government determines.
Foreign service, which includes deputations to international organizations are to follow guidelines issued by the Department of Personnel and Training.
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