PSU Employees No Longer Have Retirement Benefits If Dismissed: Centre

Dismissal or removal of employees from a public sector undertaking will now lead to them losing their retirement benefits, according to amendments brought about in civil service law by the Union government.

The final decision regarding dismissal will be subject to review from the administrative ministry concerned with the matter. The personnel ministry made notable changes in the Central Civil Services (Pension) Rules, 2021 regarding the same.

According to the recently-notified Central Civil Services (Pension) Amendment Rules, 2025, "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."

"...and 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," the new rules notified on May 22.

Public sector undertaking employees, once absorbed, were previously protected from retirement benefit forfeiture due to any misconduct occurring after their absorption, regardless of subsequent dismissal.

Additionally, the updated regulations specify that the stipulations concerning "pension and family pension subject to future good conduct" and "compassionate allowance" will now also apply to employees who have been dismissed or removed from service.

The Central Civil Services (Pension) Rules, 2021 apply to the government servants appointed on or before Dec. 31, 2003, except "railway servants", "persons in casual and daily rated employment" and officers of Indian Administrative Service , Indian Police Service and Indian Forest Service among others.

(With Inputs From PTI)