Anisha Kumari | May 30, 2025 |
New Pension Rule for PSU Employees
A significant change has been made to pension regulations by the Central Government which will directly impact the employees absorbed Public Sector Undertakings (PSUs) from earlier government roles. It has been stated that dismissal or removal of an employee from service in a PSU can result in the forfeiture of pension benefits earned during the previous government service through an amendment to the Central Civil Services.
An employe who gets dismissed or removed from service after absorption due to misconduct will not get it’s PSU-related retirement benefits as per the Central Civil Services (Pension) and also forfeit pension benefits earned during their tenure under the Central Government. The revised Rule 37(29C) outlines that:
“…the dismissal or removal from service of the public sector undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall lead to forfeiture of the retirement benefits for the service rendered under the Government also. In the event of his dismissal or removal or retrenchment, the decision of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking. For the purpose of this Rule, the relevant provisions of Rule 7 and 8 read with Rule 41 and Rule 44(5)(a) and (b) would be applicable analogous as is applicable to a government servant under these Rules.”
To make sure that the dismissal, removal or retrenchment from PSU is done fairly, it’ll undergo a review by the relevant administrative ministry.
This review will provide fairness and balance in the implementation of the rule.
Earlier, pension benefits earned during government service used to stay untouched even if a PSU employee was removed from service post-absorption. The new amendment marks a significant departure from this approach, introducing more strict consequences for misconduct.
The amendment will apply to those employees who were appointed to government service on or before Dec 31, 2003. The government wants PSU employees to be more responsible by making this change. It clearly shows that any bad behavior can cost to one’s financial benefits, including pensions earned during earlier government service.
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