The Railway Board has issued a new directive (RBE No. 15/2025) to clarify the impact of compulsory retirement, dismissal, or removal from service on the pension benefits of railway employees covered under the National Pension System (NPS).
Pension Disbursement for Affected Employees
According to the directive, railway employees who are compulsorily retired, dismissed, or removed from service will receive their accumulated pension corpus as a lump sum and annuity. The disbursement will be made in accordance with the regulations set by the Pension Fund Regulatory and Development Authority (PFRDA), which governs the exit of NPS subscribers before retirement age.
Option to Continue NPS Subscription
The directive also states that affected employees have the option to continue their NPS account as non-government subscribers under the same Permanent Retirement Account Number (PRAN). This means they can keep contributing to their NPS account even after their removal from railway service, as per PFRDA guidelines.
Other Retirement Benefits Unaffected
The Railway Board has clarified that this directive does not impact other retirement benefits such as gratuity or other admissible payments. These will be provided based on the existing rules applicable to the employee.
Alignment with NPS Rules
This clarification aligns with the New Pension Scheme (now NPS), introduced by the Ministry of Finance through a notification on December 22, 2003. The scheme became mandatory for all new government recruits, including railway employees, from January 1, 2004.
Ensuring Transparency for Employees
With this directive, the Railway Board aims to provide clarity on the financial entitlements of employees who face compulsory retirement, dismissal, or removal due to disciplinary actions. The move ensures that affected employees understand their pension benefits and available options under the NPS framework.
