The Central Pension Accounting Office (CPAO) has issued fresh guidelines to streamline the pension disbursement process for retirees under the National Pension System (NPS). The new instructions aim to ensure that pensioners receive their dues on time without unnecessary delays. In a memo dated March 12, 2025, the CPAO emphasized the need to follow the same procedural framework as the Old Pension Scheme (OPS) to avoid errors. The CPAO’s latest reminder follows an earlier directive issued on December 18, 2023, instructing officials to handle NPS cases similarly to OPS cases. Despite these clear instructions, CPAO noticed discrepancies in submissions by various Pay and Accounts Offices (PAOs), which have resulted in pension processing delays.
 

The memo highlighted that some PAOs had continued submitting three copies of the Provisional Pension Payment Order (PPO) for NPS cases instead of the required two copies of the PPO Booklet — one for the pensioner and one for the disburser. This incorrect practice has been identified as a key reason for delays in pension disbursement. To address this issue and speed up the pension release process, CPAO has directed all concerned officials — including Principal CCAs, CCAs, Accountants General (AGs), and authorized Bank CPPCs — to strictly adhere to the revised guidelines. The updated instructions stress the importance of submitting only two copies of the PPO Booklet to CPAO in both OPS and NPS cases to minimize errors and reduce delays. The updated process is expected to ensure that retired employees under the NPS receive their pensions on time without unnecessary complications.
 

Understanding the Different Pension Schemes

The latest CPAO guidelines highlight the importance of distinguishing between pension systems in India: Old Pension Scheme (OPS), National Pension System (NPS), and the recently introduced Unified Pension Scheme (UPS).
 

Old Pension Scheme (OPS)
The OPS was applicable to government employees who joined service before December 22, 2003. This traditional pension model offered a fixed pension calculated based on the employee’s last drawn salary and total years of service. It ensured lifelong pension benefits with a survivor pension for the employee’s family in case of their passing.
 

National Pension System (NPS)
Introduced in 2004, the NPS replaced OPS for government employees joining after the cutoff date. Unlike OPS, the NPS is a market-linked system where the pension amount depends on the investment’s performance. Over time, the NPS expanded to include private sector employees, self-employed individuals, and NRIs.
 

Unified Pension Scheme (UPS)
Launched in 2024, the UPS combines the benefits of both OPS and NPS. This hybrid system ensures a guaranteed pension along with a contribution-based investment model to provide financial security post-retirement. While UPS is currently available for central government employees, there are ongoing discussions about extending it to state employees as well.
 

Ensuring Timely Pensions with Revised CPAO Guidelines

The CPAO’s recent memo reflects the agency’s commitment to ensuring timely pension payments while addressing procedural errors that have hindered NPS retirees from receiving their funds efficiently. By mandating that PAOs submit only two PPO copies — instead of three — CPAO aims to simplify and accelerate the disbursement process. The revised guidelines highlight CPAO's proactive steps in minimizing administrative delays and ensuring that pensioners under the NPS scheme can access their well-deserved retirement benefits without unnecessary obstacles.