KartavyaDesk

Rule 37 - PSU Absorption | KartavyaDesk

CCS Pension

Original Rule Text

37. Conditions for payment of pension on absorption consequent upon conversion of a Government Department into a Public Sector Undertaking.- (1) On conversion of a department of the Central Government into a public sector undertaking, all Government servants of that Department shall be transferred en-masse to that public sector undertaking, on deemed deputation on terms of foreign service without any deputation allowance till such time as they get absorbed in the said undertaking, and such transferred Government servants shall be absorbed in the public sector undertaking with effect from such date as may be notified by the Government.

What This Means

Rule 37 of the CCS (Pension) Rules, 2021, deals with what happens to government employees' pensions when a government department is converted into a Public Sector Undertaking (PSU). Basically, when a whole department is transformed into a PSU, all the government employees working there are automatically transferred to the PSU. This transfer is initially considered a 'deemed deputation' on foreign service terms, meaning they are working for the PSU but are still technically government employees for a certain period. They don't get any extra allowance for this deputation. This continues until they are officially absorbed into the PSU, which happens on a date announced by the government.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Applies when a government department is converted into a Public Sector Undertaking (PSU).
  • •All government employees of the department are transferred en-masse to the PSU.
  • •Initial transfer is treated as 'deemed deputation' on foreign service terms without deputation allowance.
  • •Absorption into the PSU takes effect from a date notified by the government.
  • •Focuses on the transition period and the status of employees during that time.

Practical Example

The Department of Telecommunications (DoT) decides to convert its research wing, the Centre for Advanced Telecom Studies (CATS), into a PSU named 'Bharat Telecom Innovations Ltd' (BTIL). All 500 employees of CATS, including Mr. Sharma, a Senior Research Officer, are transferred to BTIL on deemed deputation. For the first six months, Mr. Sharma continues to draw his regular government salary but does not receive any deputation allowance. After six months, the government issues a notification stating that all CATS employees are officially absorbed into BTIL with effect from January 1, 2025. From that date, Mr. Sharma becomes a full-fledged employee of BTIL, and his pension benefits are governed by the rules applicable to PSU employees, taking into account his previous government service as per the relevant regulations.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What does 'deemed deputation' mean in this context?▼
It means you are considered to be working for the PSU, but you are still technically a government employee for a specific period. You continue to draw your government salary but don't receive deputation allowance.
Will I lose my pension benefits if I am absorbed into the PSU?▼
No, your previous government service will be taken into account when calculating your pension benefits under the PSU's rules. The specific rules for calculating this will depend on the regulations governing the PSU and the CCS (Pension) Rules.
What happens to my GPF account when I am absorbed into the PSU?▼
The treatment of your GPF account will depend on the specific rules and regulations governing the transfer. Generally, you will have options regarding the transfer or continuation of your GPF account, which will be communicated to you by the government.
Is there a time limit for the 'deemed deputation' period?▼
Yes, the 'deemed deputation' period lasts until the government issues a notification specifying the date of official absorption into the PSU.
Does this rule apply if only a part of the department is converted into a PSU?▼
No, Rule 37 specifically applies when the *entire* department is converted into a PSU and all employees are transferred en-masse.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 37 of the CCS (Pension) Rules, 2021, when a government department is converted into a Public Sector Undertaking (PSU), what is the initial status of the government servants transferred to the PSU?

Related Rules

Rule 62CCS (Pension) Rules, 2021 - Rule 62Rule 19CCS (Pension) Rules, 2021 - Rule 19Rule 65CCS (Pension) Rules, 2021 - Rule 65Rule 68CCS (Pension) Rules, 2021 - Rule 68Rule 72CCS (Pension) Rules, 2021 - Rule 72

Need help understanding this rule?

Ask Niti — your AI assistant for CCS Pension and other government rules