The National Pension System (NPS) is mandatory for central government employees. NPS replaced the Old Pension Scheme (OPS) in 2004, and since then, it has been applicable mandatorily for central government employees and in several states also.

When an employee joins, a few forms are required to be submitted to avail of the NPS pension benefits in case of death during service, or if the employee is discharged due to some medical reason. Failure to submit the forms would lead to a delay in disbursal of pension benefits to the employee or the nominee.

In a recent memo dated October 25, 2024, the Department of Pension and Pensioners’ Welfare (DoPPW) reiterated and directed the government departments and ministries to obtain prescribed Form 1 and Form 2 from the employees in accordance with the rules prescribed under the Central Civil Services (Implementation of National Pension System) Rules, 2021. This rule defines the formalities under ‘Rule 10’ and defines the option that every central government employee covered under NPS should exercise when joining service. The departments have been asked to obtain the necessary forms from employees for the same.

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Form 1 For Pension Option And Form 2 For Family Details

Form 1: The employee has to fill this to avail of benefits in the event of death or getting discharged from the service due to disablement or invalidation, under the NPS or Central Civil Service (Pension) Rules or the Central Civil Service (Extraordinary Pension) Rules. Notably, this form is not only meant for the new employees, but also for existing employees.

In this form, employees select the option of pension payment rules under pension, which will be paid in case of death, disability, or invalidation. The options are ‘CCS (Pension) Rules, 1972, or CCS (Extra Ordinary Pension) Rules, 1939’, OR ‘NPS under the CCS (Implementation of NPS) Rules, 2021.

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Form 2: Employees are also required to fill out Form 2 providing details of their family, and submit it to the Head of Office. The memo issued in October 2024 says that the option can be exercised any number of times before retirement. On the other hand, an employee is discharged due to disability or invalidation can ‘submit a fresh option’ at the time of such discharge.

In this form, the subscriber has to provide information, such as name, designation, and nationality, along with information of the family (spouse, children, parents, and disabled siblings), including their names, dates of birth, relationship, and marital status.

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If no option is exercised, the pension payment to a subscriber at the time of discharge from service or to the family if the subscriber dies, will be done in compliance with the Pension Fund Regulatory and Development Authority (Exits and Withdrawal under NPS) Regulations, 2015.

DoPPW had issued similar directions previously, but still, many employees have not exercised their options. In a push to update the records, the DoPPW, through its memo in October, has again asked the ministries and departments for strict compliance with the rules and update the records of the employees.