New Pension Rules 2025: Key Changes And Who Is Covered

In a recent development, the central government has announced changes to pension rules, wherein public sector employees dismissed or removed for misconduct could lose their retirement benefits, including pension.

The Centre had recently notified amendments to the Central Civil Services (Pension) Rules, 2021, through the Central Civil Services (Pension) Amendment Rules, 2025, starting May 22, 2025.

What Are The New Changes?

In case a Public Sector Undertaking (PSU) employee, who has been permanently absorbed from government service, is removed or dismissed from the service due to misconduct, they will forfeit their entire retirement benefits, including the benefits they have earned during their earlier government service.

This is a benchmark decision and a significant shift from the previous set of rules, which did not allow forfeiture of government-earned pension benefits even after the employees' dismissal from a PSU.

How Can Pension Still Be Possible?

According to the updated rules, pension and family pension is still possible subject to future good conduct.

Compassionate allowance is applicable to dismissed employees on a case-by-case basis.

Who Is Covered?

These rules are applicable to government employees appointed on or before December 31, 2003, excluding railway employees, casual and daily wage workers, IAS, IPS, and IFoS officers.

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