Retiring Soon? Why Your Last Working Day Determines Your Pension
The Central Government, through the Department of Pension and Pensioners’ Welfare (DoPPW), has clarified that an employee's pension is calculated based on the pension rules effective on their last working day—even if they are on leave or suspension.
Key Clarification on Pension Calculation
The DoPPW has provided important details to enhance pension security for government employees and their families. The department specified the exact reference day for pension computation and safeguarded pensioners from unjust reductions after retirement.
Importance of the Last Working Day
According to Rule 5 of the Central Civil Services (Pension) Rules, 2021, pension and family pension claims are governed by the rules in effect on the employee's last day of service. This date can be the day the employee retires, is discharged, allowed to resign, or passes away—whichever happens first.
“Any claim to pension or family pension shall be regulated by the provisions of these rules in force at the time when a Government servant retires or is retired or is discharged or is allowed to resign from service or dies, as the case may be,” stated the DoPPW in its Office Memorandum issued on October 30, 2025.
Summary of Pension Rule Application
- The date of pension calculation is fixed as the employee’s last working day.
- This rule applies even if the employee is on leave or suspension at that time.
- Ensures pension and family pension are fairly calculated only based on the applicable rules on that specific day.
This clarification strengthens the security of pension benefits for central government employees and prevents post-retirement pension reductions based on later rule changes.
Author’s summary: The Central Government's recent guideline ensures pension calculations for employees are secured by using rules from their last working day, providing greater clarity and fairness in pension benefits.