GPF: Interest to be given on delay in payment
New Delhi| There is news of relief for such government employees who come under the purview of ‘General Provident Fund’. If the outstanding amount of General Provident Fund is not paid on retirement, interest will be paid on the outstanding amount of ‘General Provident Fund’ for the post-retirement period. For this, the responsibility of officers has also been fixed by the Department of Pension and Pensioners’ Welfare of the Ministry of Personnel, Public Grievances and Pensions. An office memorandum in this regard has been issued by the department two weeks ago.
Recently the Department of Pension and Pensioners’ Welfare has received many such references, in which it has been asked regarding giving interest on delayed payment of GPF to retired government employees. Whether interest is payable on GPF after retirement of employees or not. The Department has cited in this regard Office Memorandum No. 3/3/2016-P&PW (F) of January 16, 2017 (copy attached). In this, detailed clarifications related to timely final payment of GPF to the retiring government employee were sent to all the ministries/departments. If the amount deposited in the provident fund account of the subscriber becomes payable, it will be the responsibility of the accounting officer to pay it. It is also noteworthy that the amount deposited in the General Provident Fund account is entirely the personal property of the government employee. Any disciplinary case pending against them or penalty imposed has no impact on the disbursement of General Provident Fund amount. According to Rule 11 (4) of the General Provident Fund Rules, if the arrears of GPF are not paid on retirement, interest is required to be paid on the arrears of the General Provident Fund for the post-retirement period.
In January 2017 the Office Memorandum was issued by the Department of Pension and Pensioners’ Welfare, Ministry of Personnel, Public Grievances and Pensions. In that, clarification was issued in the case related to making the final payment of GPF to the government employee within the stipulated time on retirement. It said that in the review meetings held with various Ministries/Departments of the Central Government to evaluate the future implementation status, it has been observed that in many cases the retiring employee/officer will be given General Provident Fund ‘GPF’ on his retirement. Final payment of ‘GPF’ is not being made immediately, due to which interest has to be paid for the delayed period.
Rule 34 of the General Provident Fund (Central Service) Rules provides expressly that the accounting officer shall have the obligation to make payment when the amount deposited in the provident fund account of the subscriber becomes due. Authorization to make payment shall be issued at least one month before the date of retirement on completion of superannuation age, but shall be payable on the date of retirement. It is mentioned that the requirement to submit an application for final payment of General Provident Fund by a retiring employee has been abolished by Notification No. 20 (12)/94-P & P W (E) of 15 November 1996 of this Department. It is notified under SO No 3228 of 23 November 1996.
According to Rule 11 (4) of the General Provident Fund Rules, if the arrears of the General Provident Fund are not paid on retirement then interest will have to be paid on the arrears of the General Provident Fund for the post-retirement period. While interest permission for a period of six months after normal retirement can be granted by the Pay and Accounts Officer ‘PAO’, payment of interest for more than six months is subject to the approval of the Head of the Accounts Office and for a period of more than one year. Approval of the Controller of Accounts/Financial Advisor is required.
In order to ensure timely payment of General Provident Fund and to avoid unnecessary burden of interest after retirement, it has now been decided that in all such cases where as per Rule 11 (4) of the General Provident Fund Rules, 1960, payment of interest on General Provident Fund becomes mandatory, those cases are referred to Administrative Ministry/Will be presented before the Secretary of the department. In all such cases, the Secretary of the Administrative Ministry/Department will fix the responsibility to take appropriate action against the Government servant found responsible at all levels for delay in payment of General Provident Fund.
