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Thursday, April 1, 2021

Latest Circular regarding payment of interest at the rate of GPF on the amount of Legacy Fund under the New Enhanced Pension (NPS) Scheme

Latest Circular regarding payment of interest at the rate of GPF on the amount of Legacy Fund under the New Enhanced Pension (NPS) Scheme

The government has declared interest rate on General Provident Fund and other similar funds for the October – December quarter. The Budget Division of Department of Economic Affairs, under the Ministry of Finance, has recently issued the notification that the fund accumulation at the credit of subscribers of General Provident Fund (GPF) and other similar funds will carry an interest rate of 7.1 per cent for the period October to December 2020. Therefore, the GPF interest rate from October 2020 to December 2020 is 7.1 per cent.




As per the website of The Ministry of Personnel, Public Grievances and Pensions, the General Provident Fund (Central Services) Rules 1960 applies to all temporary government employees after a continuous service of one year, all re-employed pensioners (other than those eligible for admission to the Contributory Provident Fund ) and all permanent government employees.




Contributory Provident Fund Rules (India ), 1962 is applicable to every non-pensionable servant of the Government belonging to any of the services under the control of the President. The Rules provide for the withdrawal of advances or withdrawals from the CPF for specific purposes. As in GPF Rules, the CPF Rules also provide for Deposit Linked Insurance Revised Scheme.

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The Department of Pension & Pensioners’ Welfare of the Ministry of Personnel, Public Grievances & Pension has been receiving grievances from retired government servants for inaccurate and delayed GPF settlement, along with interest, on their retirement, due to frequent instances of missing credits in their GPF accounts.




The missing credits in General Provident Fund (GPF) were reported mostly by subscribers in their GPF statements, who during their service moved from one establishment to another or were assigned foreign deputation and also by officers of All India Service, who proceeded on deputation outside their cadres.




The Department observed that the GPF account is maintained by an establishment different from that generating their salary bills and deducting their GPF subscription.





Therefore, the Department states that a co-ordination mechanism between such two establishments is most crucial to avoid any lapses in updated maintenance of GPF accounts.




Earlier in 2020, the Department had issued an Office Memorandum (OM) taking the following steps:




In order to avoid such grievances and for the sake of greater transparency, it has henceforth been decided that,




A) it shall be mandatory for all offices maintaining GPF Accounts to intimate the particulars of missing credits, once every financial year, to the authority responsible for deducting the GPF subscription, under intimation to the concerned subscriber.


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