Entitlement on Absorption in or under a Corporation or Body for Central Govt Employees Opted for Unified Pension Scheme under NPS

Entitlement on Absorption in or under a Corporation or Body for Central Govt Employees Opted for Unified Pension Scheme under NPS

New Delhi: Department of Pension and Pensioners’ Welfare (DoP&PW), under the Ministry of Personnel, Public Grievances and Pensions, has issued detailed instructions regarding entitlement on absorption in or under a corporation, company, or autonomous body for Central Government employees who have opted for the Unified Pension Scheme (UPS) under the National Pension System (NPS).

The Office Memorandum, dated 29th October 2025 (No. 57/03/2022-P&PW(B)), clarifies provisions under Rule 16 of the Central Civil Services (Implementation of Unified Pension Scheme under NPS) Rules, 2025.

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Key Provisions:

Deemed Retirement on Absorption:
A government servant covered under UPS who is permitted to be absorbed in a corporation, company, or body controlled or financed by the Central or State Government shall be deemed retired from the date of such absorption.

Less than 10 Years of Service:
If absorption occurs before completing 10 years of qualifying service, the accumulated pension wealth in the individual UPS corpus shall be paid in lump sum as per regulations notified by the Pension Fund Regulatory and Development Authority (PFRDA).

10 Years or More of Service:
In cases where the subscriber has completed 10 years or more of qualifying service at the time of absorption, they will be entitled to the assured payout admissible under the PFRDA (Operationalisation of Unified Pension Scheme) Regulations, 2025, similar to the benefit on superannuation.

Conversion of Departments into PSUs or Autonomous Bodies:
If a government department is converted into a Public Sector Undertaking (PSU) or Autonomous Body, the employee has two options:

(i) Retire based on service in the Government and receive UPS benefits as per superannuation (if qualifying service is 10 years or more).

(ii) Continue in the PSU or Autonomous Body and receive UPS benefits based on combined qualifying service.

Implementation Mechanism:
For employees opting to continue in PSUs or Autonomous Bodies, the payment mechanism for UPS benefits will be governed by the arrangements specified by the Central Government.

The DoP&PW has instructed all Ministries, Departments, and Organizations to circulate these provisions among officials handling UPS/NPS-related matters for strict implementation.

The Office Memorandum has been issued with the approval of the competent authority and signed by Shri S. Chakrabarti, Under Secretary to the Government of India.

Source: DoP&PW O.M. No. 57/03/2022-P&PW(B) dated 29.10.2025