Pension vesting period

Generally, a member becomes eligible for pension after ten years of membership in the scheme, provided the member attains normal retirement age as per their respective service rules. A member may however avail monthly pension five years prior to attaining the normal retirement age. The monthly pension is accordingly reduced for the number of months falling short of normal retirement age.

Pension formula and annual indexation

The amount of monthly pension depends on the basic salary upon retirement and the number of years of service. Once started, pension is paid until the death of member and is indexed annually based on CPI, up to a maximum of 5%. Thereon, surviving family members are eligible to receive other pension benefit as described in the following paragraph.

Surviving family benefits

A member must have served for a minimum of three years to be eligible for surviving family benefits. Children of deceased members, under the age of 18 years receive monthly pension. Up to three children at a time are eligible for the benefit. The benefit amount is slightly higher for orphans.

Surviving spouse of a member is also eligible for monthly pension, in addition to the children/orphan benefit. Spouse of deceased armed forces personnel start receiving monthly pension immediately upon demise of member. Spouse of civil members start receiving monthly pension only from the age of 50 years.

For deceased members who are not survived by any children or spouse, their surviving parents are eligible for monthly pension.

Option to avail lump sum benefit

A civil member (of NPPFP) who has been a member for less than 10 years isn’t eligible for monthly pension and must take lump sum refund of his/her pension contribution. On the other hand, a member with 20 or more years of service must take monthly pension. However, members between 10 and 20 years of service have the option to choose either to take lump sum refund or wait to receive monthly pension upon attaining retirement age.

For armed forces member (of AFPPFS), (s)he is eligible to receive lump sum up to the tenth year of service. After that, members have to wait till their rank-specific retirement age to receive monthly pension.

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