Govt amends CCS Pension Rules: Retirement benefits of PSU absorbees can be forfeited for misconduct

The Department of Pension and Pensioners' Welfare (DoPPW) has notified a change in the Central Civil Services (Pension) Rules, 2021.

The notification has inserted a new clause in sub-rule 29 of rule 37 of the CCS (Pension) Rules, 2021. It says the retirement benefits for the service rendered under the Government can be forfeited or taken back if an employee is found guilty of any misconduct following his absorption in a public sector undertaking (PSU) from a Central Government department.

"the dismissal or removal from service of the public sector undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall lead to forfeiture of the retirement benefits for the service rendered under the Government also and in the event of his dismissal or removal or retrenchment the decision of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking," the DoPPW said in the notification dated May 22, 2025.

What was the previous rule?

The above rule previously said retirement benefits will not be forfeited in case of dismissal or removal of an employee from the service of the PSU for any misconduct.

"the dismissal or removal from service of the public sector undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall not amount to forfeiture of the retirement benefits for the service rendered under the Government and in the event of his dismissal or removal or retrenchment the decisions of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking," clause C of sub-rule 29 of rule 37 of the CCS (Pension) Rules, 2021 said before the amendment.

Rule 37 of the CCS Pension Rules 2021 explains conditions for payment of pension on absorption of employees after the conversion of a Government department into a PSU.

When a Government department becomes a PSU, then all the earned leave and half-pay leave at the credit of the employees on the date of absorption is transferred to the PSU. Further, the balance of the provident fund standing at the credit of the absorbed employees on the date of their absorption in the public sector undertaking is transferred to the new provident fund account of the employees in such undertaking.