Pension And Gratuity: Government Clarifies Payment Rules For Compulsory Retirement

The Department of Pension and Pensioners' Welfare (DoPPW) has clarified the pension and gratuity rules for government employees who face compulsory retirement. The DoPPW’s office in a  memorandum dated October 30, 2025, addressed the calculation of pension or service gratuity under Rule 44 of the Central Civil Services (Pension) Rules, 2021. It said that the primary provisions that govern compulsory retirement are mentioned under Rule 40 of the CCS (Pension) Rules, 2021. However, the clarification is specifically about Rule 44, sub-rule 4 (a) and (b) as it differentiates the pension and gratuity calculation based on the employee’s service tenure.

The OM said that calculation is based on qualifying tenure: those who have served 10 years or more, and those who have served less than 10 years.

Compulsory Retirement After 10 Years Of Service

According to the memorandum, a government employee who has completed “not less than 10 years” of qualifying services and who, under Rule 40, is considered eligible for compulsory retirement, is entitled to receive a compulsory retirement “pension”.

Rule 44, sub-rule (4) (a) says, “Where a government servant is compulsorily retired from service after completing a qualifying service of not less than 10 years and has become eligible for grant of compulsory retirement pension under rule 40, the amount of compulsory retirement pension shall be such portion or percentage of the superannuation pension calculated under sub-rule (1), as the competent authority may sanction under rule 40.”

According to Rule 44, sub-rule (1), “A Government servant, who retires under rule 33, rule 34, rule 35, rule 36, rule 37, rule 38 or rule 39, after completing a qualifying service of not less than 10 years, shall become eligible for grant of a pension calculated at fifty per cent of emoluments or average emoluments, whichever is more beneficial to him, subject to a minimum of nine thousand rupees per month and maximum of one lakh twenty-five thousand rupees per month.”

The rules (rule 33, rule 34, rule 35, rule 36, rule 37, rule 38, or rule 39) of CCS (Pension), Rules 2021, pertain to classes of pensions and conditions governing the grant of pension and gratuity.

Compulsory Retirement Before Completing 10 Years Of Service

If a government employee is compulsorily retired before completing the qualifying 10 years of service, they are eligible to receive compulsory retirement “service gratuity”.

Rule 44, sub-rule (4) (b) reads, “A Government servant, who is compulsorily retired from service before completing a qualifying service of 10 years, shall be eligible for grant of a compulsory retirement service gratuity under rule 40 and the amount of service gratuity in such cases shall be such portion or percentage of the superannuation service gratuity calculated under sub rule (2), as the competent authority may sanction under rule 40.”

The service gratuity is calculated as per sub-rule (2) of Rule 44.

According to Rule 44, sub-rule (2), “The amount of service gratuity in such cases shall be calculated at the rate of half a month's emoluments for every completed six-monthly period of qualifying service.”

What Does Sub Rule (1) Of Rule 40 Entail?

The sub-rule (1) of Rule 40 of the CCS (Pension) Rules, 2021, reads, “A Government servant compulsorily retired from service as a penalty may be granted, by the authority competent to impose such penalty, pension or retirement gratuity or both at a rate not less than two-thirds and not more than full superannuation pension or gratuity or both admissible to him on the date of his compulsory retirement.”

So, whether compulsory retirement is before completing 10 years of service or after it, the calculation is done as per the provisions under Rule 44, but the final amount is determined by the competent authority as per the provisions under Rule 40.