Family pension does not forfeit the deceased subscriber’s employee NPS contribution or attributable returns.

The applicant’s son, Shri Vikas Sureshbhai Rana, was employed as a Lower Division Clerk under the Ministry of Defence and died in service on 17 October 2011.

The applicant had earlier filed O.A. No. 505/2014 seeking terminal benefits and family pension; that application was disposed of on 16 September 2015 with directions to finalise the benefits.

She was subsequently sanctioned family pension under the CCS (Pension) Rules, 1972, and was paid death-cum-retirement gratuity, leave encashment and CGEGIS benefits.

The present dispute concerned the accumulated amount in the deceased employee’s National Pension System (NPS) account.

Although the applicant submitted representations, indemnity bonds, relinquishment deeds and other legal-heir documents, the corpus was not released due to procedural and verification issues between the departmental authorities and the Central Recordkeeping Agency.

The respondents contended that, since family pension had been granted, the NPS corpus was required to be transferred to the Government under the instructions then prevailing.

Whether the grant of family pension under the CCS (Pension) Rules, 1972 disentitled the applicant from receiving any part of the accumulated NPS corpus of the deceased employee?

Whether, under the CCS (Implementation of National Pension System) Rules, 2021 and DoP&PW Office Memorandum dated 14 October 2024, the employee’s contribution and returns were payable to the nominee or legal heirs notwithstanding the grant of family pension?

The Tribunal considered the earlier DoP&PW Office Memorandum dated 5 May 2009 and PFRDA instructions dated 30 July 2014 and 26 May 2016, under which, where family pension was granted to the family of a deceased NPS subscriber, the accumulated pension wealth was transferred to the Government.

It applied Rule 20(2) of the CCS (Implementation of National Pension System) Rules, 2021, which provides that, where CCS pensionary benefits are payable, the Government contribution and returns thereon are to be transferred to the Government, while the remaining corpus is payable in lump sum to the valid nominee or, in the absence of a valid nomination, to the legal heirs.

For employees who died before the 2021 Rules came into force, the Tribunal relied on DoP&PW O.M. No. 57/06/2021-P&W(B) dated 14 October 2024, which made the revised position effective from 1 January 2004 and directed payment of the employee’s contribution with returns, together with interest calculated at the rates applicable to Public Provident Fund deposits, from the date of death until actual payment.

The Tribunal held that the applicant’s son’s death in 2011 placed the case within the retrospective coverage of the 14 October 2024 Office Memorandum, notwithstanding that it preceded the 2021 Rules.

Although the grant of family pension entitled the Government to retain or receive the Government contribution and the returns attributable to it, it did not extinguish the deceased employee’s proprietary interest in his own NPS contribution or the returns earned on that contribution.

Accordingly, the applicant’s claim to the entire NPS corpus was rejected, but the respondents’ position that no amount was payable to her was also found inconsistent with the 2021 Rules and the 2024 Office Memorandum.

The Tribunal therefore directed segregation of the employee and Government contributions, with the employee’s share and attributable returns to be paid to the valid nominee or legal heirs.

Respondent Nos. 1 to 3, in coordination with Respondent No. 4, were directed to separately calculate the employee’s contribution and returns and the Government’s contribution and returns.

The Government’s share was to be retained in or transferred to the appropriate Government account.

The employee’s contribution, together with interest calculated under the 14 October 2024 Office Memorandum, was to be released to the valid nominee or legal heirs, along with a detailed calculation statement.

The exercise and payment were directed to be completed within sixty days of receipt of the certified copy of the order; there was no order as to costs.