Para 7.17 — This paragraph governs two types of audit over pen
Original Rule Text
7.17 AUDIT OF PENSION PAYMENTS DISBURSED BY AUTHORISED BANKS (A) The pensionary payments, Accounts, Records and Registers maintained in the CPPC of Authorized Banks making pension payments shall be open to audit by the CAG of India or any person appointed by Government in this regard.
(B) In addition to audit by C&AG, the CPAO will also undertake the Internal Audit of the CPPCs. The Internal Audit Wing, CPAO will conduct audit of pensionary payments by Authorised Banks to check:
i. The Internal Controls Mechanisms of the Banks; ii. The accuracy and correctness of pension disbursements by the Banks and its reporting and accounting; iii. Existence of the grievance redressal mechanism for pensioners and its functioning; iv. Whether various instructions issued by the Government from time to time are being followed or not;
Note: - Please also refer scheme booklet PARA No. 28 (Post payments checks)
7.18 PROCEDURE FOR PAYMENT OF ARREARS OF PENSION a. Payment of Pension Arrear due to delayed finalization of Pension cases: It must be ensured that arrears of pension due to the pensioners on account of delayed finalization or for any other reason may be correctly worked out. They must be paid to the pensioners in accordance with the provisions of various rules and orders applicable, by the PAOs. Only the future monthly pensions payable will be authorized to the Banks by transmitting the PPOs to CPAO. The details of the arrear of Pension paid by the PAO and Month of commencement may invariably be mentioned in the PPO while forwarding the PPO to CPAO by the PAO for arranging payment of pension.
b. Payment of Arrear of Pension due to death of Pensioner before forwarding of PPO to CPAO: There may be an occasion when the pensioner opting to draw pension through a bank dies before the PPO is sent to CPAO. In such cases, Pay and Accounts Office will make the payment of arrears of pension to the heirs of deceased pensioner and PPO will be sent to CPAO for authorizing family pension only. However, the details of the arrear of pension may be mentioned in the PPO while forwarding it to the CPAO.
c. Payment of arrear due to non-submission of the life certificate relate to period less than three years: If the arrears relate to a period less than three years and if they have not been credited due to late submission of prescribed certificate
(s) by the pensioner or for routine matters which do not require detailed examination with reference to the files of PAOs, they may be paid by the CPPC of authorized Banks after obtaining specific orders of the Manager/Officer in charge of the bank who would release the payment subject to verification of the bonafide of the claim of the pensioner. It must be ensured that no double payment/over payment is made by the paying branch. Such payments will also be mentioned prominently in the payment scrolls, quoting particulars of the latest relevant half yearly returns through which non-drawl had been reported. Authority CGA's UO No. 1(7) (1)2000/TA/377 dated 19-8-2002.
d. Payment of arrear due to non-submission of the life certificate relate to period three years and above: If pension has not been credited to the account of the pensioner for a period of 3 years and above, the disburser's portion of the PPO should be returned to the CPAO by the CPPC, with suitable endorsement thereon, specifying the date up to which the pension was credited in the pensioner's account; CPAO will forward the same to PPO issuing authority for updating of their record. Payment of arrears in such cases as also payment of current pension will be made by the CPPC on receipt of PPO with a sanction of the competent authority through the CPAO. Such payments will also be mentioned prominently in the e-payment scrolls.
e. Pension Arrear when pensioner expires: Pension shall be drawn for the day of pensioner's death irrespective of the time of the death. On receipt of a death certificate in respect of pensioner, the CPPC will work out the amount of arrears due to the deceased or over-payments, if any, made to him. It will take action immediately to recover the overpayment from the deceased's account in terms of the undertaking obtained from the pensioner before his/her retirement i.e. at the time of submission of pension papers to the Head of the Office. Payment of arrears of pensioners will be regulated as under:
(i) Cases where valid nomination exists: The CPPC will enter the date of death of the pensioner in the disburser's portion of the PPO and will retain this information on its database with suitable audit trail and in the register maintained in their software in the form. An entry for date of death of the pensioner will be made in pensioner’s half by PAHB. The pensioner's half of PPO will then be returned to the nominee if family pension stands authorised through the same PPO; otherwise, it will be returned by CPPC to CPAO along with the disburser's half. The CPAO will up-date its record and transmit both halves of the PPO after keeping necessary note in their records to the PAO/AG who had issued the PPO for similar action and record. For payment of arrears to the nominee, he/she will be asked to apply for the same to the PAHB along with the pensioner's half of the PPO showing the period of arrears. The PAHB, after verifying the fact that the payment is actually due to the deceased pensioner, and also the particulars of the nominee as given in the nomination, will intimate the CPPC along with pensioners’ portion of PPO for making payment by crediting the account of the claimant. The provision of this rule will apply mutatis mutandis to cases where the family pension ceases to be payable either due to death of the family pensioner, his/her remarriage/marriage or on the pensioner attaining the maximum age prescribed in the rules.
(ii) Cases where valid nomination does not exist: In the absence of any nomination made by the pensioner, the arrear of his/her pension are paid as per procedure prescribed in the Government of India, Ministry of PPG & Pensions, Department of Pension & Pensioners Welfare New Delhi OM No. 1/22/2012-P&PW (E) dated 10.07.2013.
(iii) Cases where pensioner expires without receiving first payment: Bank should start paying family pension on receipt of death certificate and undertaking of recovery of excess payment in case of Joint Account. Otherwise, the surviving spouse has to open a fresh account for continuation of his/her family pension.
(iv) Cases where pensioner expires without receiving commuted value of pension/ Additional commuted value of pension: The commuted value of pension/Additional commuted value of pension may be paid as per nomination. If there is no nomination, the commuted value of pension/additional commuted value of pension arrear will be paid in the manner given in Rule 7(2) of CCS (commutation of Pension) rules 1981 read with Rule 47(1)
(b) of CCS pension Rules 2021. Unless otherwise specified, payment of Death/Retirement gratuity is not covered under the Scheme. (Refer para 2.95 of Subsidiary Instructions to CGA (R&P) Rules, 2022 and para 21 of Scheme Booklet (2021), CPAO)
What This Means
This paragraph governs two types of audit over pension payments made by authorized banks. First, the CAG of India (or any Government-appointed person) has full audit access to all pension payment records, accounts, and registers at the Central Pension Processing Centres (CPPCs) of banks. Second, CPAO conducts its own Internal Audit of CPPCs to check internal controls, accuracy of disbursements, grievance redressal mechanisms, and compliance with government instructions. The paragraph also details the procedure for paying pension arrears in various situations — delayed finalization, death of pensioner before PPO reaches CPAO, arrears due to late life certificate submission (under 3 years vs. 3+ years), and the handling of pension when a pensioner dies (including cases with and without valid nominations, death before first payment, and unpaid commuted values).
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1CAG has statutory audit access to all pension records at bank CPPCs
- 2CPAO conducts Internal Audit of CPPCs covering controls, accuracy, grievance redressal, and compliance
- 3Pension arrears from delayed finalization are paid by PAOs, not banks; only future monthly pension goes to CPAO
- 4Late life certificate arrears under 3 years can be paid by the bank CPPC with manager approval; 3+ years requires PPO return to CPAO
- 5On pensioner death: arrears go to nominee if nomination exists; otherwise per DoPPW OM dated 10.07.2013
Practical Example
A pensioner fails to submit the annual life certificate for 2 years, so the bank stops crediting pension. When she finally submits it, the CPPC Manager verifies the claim and releases the 2-year arrears, noting the details prominently in the payment scrolls with reference to the half-yearly return that reported the non-drawl. If the gap had been 3 years or more, the CPPC would have returned the PPO to CPAO, and payment would resume only after the competent authority re-sanctions it.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Cross References
Frequently Asked Questions
Can the bank pay pension arrears on its own if a pensioner has not drawn pension for 4 years?▼
What happens to a deceased pensioner's unpaid pension if no nomination was made?▼
Does CPAO's Internal Audit replace the CAG audit of pension payments?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.