No Gratuity on Resignation for Central Government Employees under NPS: DoPPW Clarifies — What if Odisha Government Employees Leave After 5 Years?

The Department of Pension & Pensioners’ Welfare (DoPPW), under the Ministry of Personnel, Public Grievances & Pensions, has issued a crucial clarification regarding gratuity for Central Government employees covered under the National Pension System (NPS). As per the Office Memorandum (No. 2/8/2025-P&PW(F)), employees under the CCS (Payment of Gratuity under NPS) Rules, 2021 are not entitled to gratuity if they resign from service, except in limited cases defined under the rules.

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Rule 22 of the CCS (Payment of Gratuity under NPS) Rules states that gratuity becomes payable only if a government servant retires on superannuation, voluntary retirement, or invalidation, or is absorbed in a government-controlled corporation or autonomous body. The gratuity amount is calculated as one-fourth of the last emoluments for every completed six-month period of service, subject to a maximum of 16½ times the emoluments.

However, under Rule 17, resignation leads to forfeiture of past service — meaning gratuity cannot be paid. The only exceptions are (i) Technical Resignation — when an employee resigns to join another government post with proper permission.(ii) Absorption Cases — when an employee is absorbed in a PSU or autonomous body where past service is protected.

This clarification means that normal resignation = no gratuity. Only technical or absorption cases qualify for protection of gratuity benefits.

What About Odisha Government Employees?

Many Odisha government employees are asking whether the same rule applies to them. Under the Odisha Civil Services (Pension) Rules, 1992, gratuity is payable only when the employee retires, is invalidated, or superannuates after completing five years of qualifying service.

Therefore, If an employee resigns voluntarily after five years, gratuity is not payable as resignation breaks service continuity.If the employee joins another government or autonomous body through proper channel (technical resignation), past service may be protected and gratuity may become payable. As of now, the Odisha Finance Department has not issued a separate clarification similar to DoPPW’s, but state rules largely follow the Central pattern.

Key takeaway- Odisha employees planning to resign to join Central govt job( any other government job not relating to Government of Oidsha) after five years should ensure that their resignation is treated as technical — with proper permission — to safeguard gratuity and service benefits.