The Centre has recently addressed an important question regarding whether interest will be charged on the Provident Fund (PF) after retirement if payments are not received on time. A notification has been issued clarifying this matter. Here are the details.
The Centre has provided several important details concerning the General Provident Fund (GPF) for government employees after retirement.
This clarification from the Department of Pension and Pensioners Welfare (DoPPW) resolves uncertainty surrounding interest payments on delayed GPF disbursements.
The new instructions, dated October 25, 2024, emphasize the need for timely processing at every stage, from preparing retirement lists to issuing the Pension Payment Order (PPO).
The notice clarifies the payment of interest on late final payments of the General Provident Fund (GPF) owed to retiring government employees, the settlement of liabilities by the responsible authorities, and the consequences faced in case of any delays in disbursement.
Key Points on Payment of GPF to Retired Employees:
According to Rule 34 of the General Provident Fund (Central Service) Rules, 1960, the Accounts Officer must ensure that the GPF amount is paid on time after the subscriber’s retirement.
The GPF amount is the sole property of the individual government employee, and any pending disciplinary action against them will not affect its disbursement.
Interest on Late Payments: As per Rule 11(4), interest will be payable following retirement if the GPF balance is not paid at retirement.
Interest Payment Procedures: The Pay and Accounts Office (PAO) may approve interest payments up to six months after retirement.
Payments requiring interest beyond six months need approval from the Head of Accounts Office, while the Controller must approve those extending beyond one year of Accounts or Financial Advisor.
Dealing with Excessive Delays: Instances where interest payment is necessary to alleviate financial burdens due to delayed GPF payments will be submitted to the Secretary of the relevant administrative ministry or department.
Assignment of Responsibility: The Secretary will ensure accountability at all levels for delays in GPF payments to guarantee timely processing and to avoid unnecessary interest payments.
What is the General Provident Fund?
Established in 1960, the GPF is a savings and pension scheme for government employees in India. Under this scheme, employees must contribute a portion of their salary to the fund, which earns interest over time. The entire accumulated amount and interest earned are paid out after retirement.