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The Central Pension Accounting Office (CPAO) has issued new directives to ensure that pension cases under the National Pension System are processed in the same manner as those under the Old Pension Scheme.
Introduced by the Pension Fund Regulatory and Development Authority (PFRDA) in 2004, the NPS replaced the Old Pension Scheme (OPS).
The Central Pension Accounting Office (CPAO) has issued new directives to ensure that pension cases under the National Pension System (NPS) are processed in the same manner as those under the Old Pension Scheme (OPS). The latest instructions, issued on March 12, reinforce guidelines set on December 18, 2023, to facilitate timely pension disbursal for retired employees.
CPAO’s Directives
The CPAO highlighted that some Pay and Accounts Offices (PAOs) continue to submit three copies of provisional Pension Payment Orders (PPOs) while processing NPS cases. However, as per the updated rules, only two copies — the pensioner portion and the disburser portion — should be submitted. The authority emphasised that failing to adhere to this procedure has caused unnecessary delays in pension disbursement.
“It has been observed that while submitting such cases to CPAO, few PAOs have not followed the guidelines in submission of NPS cases as OPS cases. To be more specific, it has been noticed that three (03) copies of Provisional PPOs (used earlier for submission of NPS cases to CPAO) have been submitted by PAOs, while submitting NPS cases as OPS cases whereas only two (02) copies of PPO Booklets (Pensioner Portion & Disburser Portion) should be submitted along with cases to CPAO,” the CPAO said in its memorandum.
The CPAO has urged all Chief Controllers of Accounts (CCAs) and Controllers of Accounts (CAs) to ensure strict compliance with these revised guidelines.
“In view of the above, all the Pr. CCAs/CCAs/CAs (with independent charge)/AGs are requested to instruct the PAOs under their control to strictly adhere to the guidelines issued in the previous OM dated 18.12.2023 by CPAO. Similarly, all the CPPCs of the authorised Banks are also requested to go through the OMs issued by this office and subsequent orders in this regard and act accordingly,” it added.
Impact of the New Pension Rule
With these changes, pension processing for retirees under NPS will now align with the procedures followed in OPS. The CPAO expects this move to streamline the pension disbursement process, making it quicker, more transparent, and hassle-free for beneficiaries.
What Is NPS?
Introduced by the Pension Fund Regulatory and Development Authority (PFRDA) in 2004, the NPS replaced the Old Pension Scheme (OPS). It caters to both government and private sector employees. Initially, it was exclusively available to government employees, but it later expanded its reach. The NPS not only ensures a pension but also offers investment opportunities. While it doesn’t guarantee a fixed pension amount, it has the potential for high returns on investments.
What Is Old Pension Scheme?
The Old Pension Scheme (OPS), established in the 1950s, was exclusively available to government employees. Under this scheme, employees received 50 per cent of their last drawn salary along with a dearness allowance as a monthly pension. Unlike the NPS, salaries were not subject to deductions, and the income received through this scheme was tax-free.