Pension

The minimum eligibility period for receipt of pension is 10 years. A Central Government servant retiring in accordance with the Pension Rules is entitled to receive pension on completion of at least 10 years of qualifying service.

In the case of Family Pension the widow is eligible to receive family pension on death of her spouse after completion of one year of continuous service or even before completion of one year if the Government servant had been examined by the appropriate Medical Authority and declared fit for Government service.

W.e.f 1.1.2006, Pension is calculated with reference to emoluments (i.e.last basic pay) or average emoluments (i.e. average of the basic pay drawn during the last 10 months of the service) whichever is more beneficial. The amount of pension is 50% of the emoluments or average emoluments whichever is beneficial.

Minimum pension presently is Rs. 9000 per month. Maximum limit on pension is 50% of the highest pay in the Government of India (presently Rs. 1,25,000) per month. Pension is payable up to and including the date of death.

Commutation of Pension

A Central Government servant has an option to commute a portion of pension, not exceeding 40% of it, into a lump sum payment. No medical examination is required if the option is exercised within one year of retirement. If the option is exercised after expiry of one year, he/she will have to under-go medical examination by the specified competent authority.

Lump sum payable is calculated with reference to the Commutation Table. The monthly pension will stand reduced by the portion commuted and the commuted portion will be restored on the expiry of 15 years from the date of receipt of the commuted value of pension. Dearness Relief, however, will continue to be calculated on the basis of the original pension (i.e. without reduction of commuted portion).

The formula for arriving for commuted value of Pension (CVP) is
CVP = 40 % (X) Commutation factor* (X)12

* The commutation factor will be with reference to age next birthday on the date on which commutation becomes absolute as per the New Table annexed to the CCS (Commutation of Pension) Rules, 1981.

Death/Retirement Gratuity

Retirement Gratuity
This is payable to the retiring Government servant. A minimum of 5 years’ qualifying service and eligibility to receive service gratuity/pension is essential to get this one time lump sum benefit. Retirement gratuity is calculated @ 1/4th of a months Basic Pay plus Dearness Allowance drawn on the date of retirement for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable for qualifying service of 33 years or more is 16 times the Basic Pay plus DA, subject to a maximum of Rs. 20 lakhs.

Death Gratuity
This is a one-time lump sum benefit payable to the nominee or family member of a Government servant dying in harness. There is no stipulation in regard to any minimum length of service rendered by the deceased employee. Entitlement of death gratuity is regulated as under:

Maximum amount of Death Gratuity admissible is Rs. 20 lakhs w.e.f. 1.1.2016

Service Gratuity
A retiring Government servant will be entitled to receive service gratuity (and not pension) if total qualifying service is less than 10 years. Admissible amount is half months basic pay last drawn plus DA for each completed 6 monthly period of qualifying service. This one time lump sum payment is distinct from retirement gratuity and is paid over and above the retirement gratuity.

Issue of No Demand Certificate
Dues owed by the retiring employees on account of Licence Fee for Government accommodation, advances, over payment of pay and allowances are required to be assessed by the Head of Office and intimated to the Accounts Officer two months in advance of the date of retirement so that these are recovered from retirement gratuity before payment. For this purpose the Licence Fee for those in occupation of Government accommodation is taken into account up to the end of the permissible period for which accommodation can be retained after retirement under the Rules on normal rent. The recovery of Licence Fee beyond that period is the responsibility of the Directorate of Estates. If, for any reason final dues cannot be assessed on time, then 10% of gratuity is withheld from gratuity on the basis of a commutation from the Directorate of Estates in this regard.

General Provident Fund and Incentives

As per General Provident fund (Central Services) Rules, 1960 all temporary Government servants after a continuous service of one year, all re-employed pensioners (Other than those eligible for admission to the Contributory Provident Fund) and all permanent Government servants are eligible to subscribe to the Fund. However, these rules are not applicable to any of the Government Servants who join service on or after 1.1.2004. A subscriber, at the time of joining the fund is required to make a nomination, in the prescribed form, conferring on one or more persons the right to receive the amount that may stand to his credit in the fund in the event of his death, before that amount has become payable or having become payable has not been paid. A subscriber shall subscribe monthly to the Fund except during the period when he is under suspension. Subscriptions to the Provident Fund are stopped 3 months prior to the date of superannuation. Rates of subscription shall not be less than 6% of subscribers emoluments are not more than his emoluments. Rate of interest varies according to notifications of the Government issued from time to time. The rules provide for drawal advances/ withdrawals from the fund for specific purposes.
The conditions for withdrawal from the fund have been liberalized and now no documentary proof is required to be furnished by the subscriber for GPF withdrawal. On retirement of a subscriber, instructions have been issued for immediate payment of final balance on retirement. No application is required to be submitted by the subscriber for final payment from the fund. .

Deposit Linked Insurance Scheme

Under the GPF Rules, on the death of subscriber, the person entitled to receive the amount standing to the credit of the subscriber shall be paid an additional amount equal to the average balance in the account during the 3 years immediately preceding the death of the subscriber subject to certain conditions provided in the relevant Rule. The additional amount payable under that Rule shall not exceed Rs. 60,000/-. To get this benefit, the subscriber should have put in at least 5 years service at the time of his/her death.

Contributory Provident Fund

The Contributory Provident Fund Rules (India), ,1962 are applicable to every non-pensionable servant of the Government belonging to any of the services under the control of the President. A subscriber, at the time of joining the Fund is required to make a nomination in the prescribed Form conferring on one or more persons the right to receive the amount that may stand to his credit in the Fund in the event of his death, before that amount has become payable or having become payable has not been paid.

A subscriber shall subscribe monthly to the Fund when on duty or Foreign Service but not during the period of suspension. Rates of subscription shall not be less than 10% of the emoluments and not more than his emoluments. The employer’s contribution at that percentage prescribed by the Government will be credited to the subscriber’s account and this is 10%. The Rules provide for drawal of advances/ withdrawals from the CPF for specific purposes. As in GPF Rules, the CPF Rules also provide for Deposit Linked Insurance Scheme.

Leave Encashment

Encashment of leave is a benefit granted under the CCS (Leave) Rules and is not a pensionary benefit. Encashment of Earned Leave/Half Pay Leave standing at the credit of the retiring Government servant is admissible on the date of retirement subject to a maximum of 300 days.

Central Government Employees Group Insurance Scheme

A portion of monthly contributions paid while in service is credited in a Saving Fund, on which interest accrues. A Government servant while entering service has to apply in Form No. 4 of the above Scheme to the Head of Office, who shall issue a sanction for the payment of subscriber’s accumulation in the Savings Fund segment together with interest and arrange for its disbursement, soon after retirement. Payments under this Scheme are made in accordance with the Table of Benefit (as issued by Department of Expenditure) which takes in to account interest up to the date of cessation of service. Insurance cover benefit under this Scheme is available to the family in the event of death of the subscriber.

7th CPC LATEST NEWS

Similar Posts:

• Retirement Benefits for Central Govt Employees
• Retirement Benefit for CG Employees – Pension | Family Pension | Gratuity | Commutation
• Senior Citizen Entitlement of Employees
• Stoppage of Retirement and Death Gratuity to the NPS Subscribers
• Retirement Age of CG Employees only 60 – No 58 and No 62

” Representatives are requesting to this Ministry that the effective date of Payment of Gratuity (Amendment) Act, 2018 will 01.01.2016 instead of 29.03.2018 at par with the Central Government employees’

1. The Payment of Gratuity (Amendment) Bill, 2018 has been passed the 14th Sabba Sabha on 15.03.2018 and 22.03.2018 respectively and assented to by the Hon’ble President on 28th March, 2018.

2. The Government vide notification No.1420(E) dated 29th March, 2018 has enhanced the gratuity ceiling under the Payment of Gratuity Act, 1972 from Rs.10 lakh to Rs.20 Lakh with effect from 29th March, 2018.

3. A Large number of representations have been received in this Ministry from the Unions/Organizations/Individuals physically, through Social Media (Facebook/Twitter etc.) and PG Portal whereby the representatives are requesting to this Ministry that the effective date of Payment of Gratuity (Amendment) Act, 2018 will 01.01.2016 instead of 29.03.2018 at par with the Central Government employees’

4. In this regard, it is infirmed that on earlier occasions also, the enhancement in gratuity ceiling under the Payment of Gratuity Act, 1972 has been implemented with prospcetive date only. Further, implementation of the same with effect will be administratively difficult and employers may not have sufficient liquidity to meet the arrears liabilities.

Similar Posts:

• Payment of Gratuity to the employees of CPSEs-Clarifications-regarding
• Payment of Gratuity (Amendment) Bill, 2017 : Increase maximum limit of gratuity in Private Sector
• Gazette Notification on Gratuity: Amount, Effective Date and Maternity Leave
• Gratuity ceiling raised to 20 Lakhs w.e.f. 29.3.2018
• Upper Ceiling on Gratuity 20 Lakhs

“Gratuity Ceiling Amendment Notifications issued by Government of India regarding Upper limit of Gratuity Payment, Date on which come into force and Maximum Period of Maternity Leave…

MINISTRY OF LABOUR AND EMPLOYMENT

NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1419(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Payment of Gratuity (Amendment) Act, 2018 (12 of 2018), the Central Government hereby appoints the 29th day of March, 2018 as the date on which the said Act shall come into force.

[No.S-42012/02/2016-SS-II]
MANISH GUPTA, Jt. Secy.

NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1420 (E).—In exercise of the powers conferred by sub-section (3) of section 4 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies that the amount of gratuity payable to an employee under the said Act shall not exceed twenty lakh rupees.

[No.S-42012/02/2016-SS-II]
MANISH GUPTA, Jt. Secy.

NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1421 (E).—In exercise of the powers conferred by clause (iv) of the Explanation to sub-section (2) of section 2A of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies for the purposes of the said clause that the total period of maternity leave in the case of a female employee shall not exceed twenty-six weeks.

[No.S-42012/02/2016-SS-II]
MANISH GUPTA, Jt. Secy.

Click to view notification

Similar Posts:

• IT Exemption for Gratuity upto 20 Lakh – Gazette Notification
• Amendment in Maternity Benefit (Mines and Circus) Amendment Rules – Gazette Notification
• Minimum Educational Qualification for Motor Vehicle Inspector – Gazette Notification
• Important Notification on EPF Non-refundable Advance
• Enhancement of Wage Ceiling under Payment of Wages Act to Rs.24000 pm

“Amendment will increase the maximum limit of gratuity of employees, in the private sector and in Public Sector Undertakings/ Autonomous Organizations…”

Cabinet approves introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for introduction of the Payment of Gratuity (Amendment) Bill, 2017 in the Parliament.

The Amendment will increase the maximum limit of gratuity of employees, in the private sector and in Public Sector Undertakings/ Autonomous Organizations under Government who are not covered under CCS (Pension) Rules, at par with Central Government employees.

Background:

The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose for enacting this Act is to provide social security to workmen after retirement, whether retirement is a result of the rules of superannuation, or physical disablement or impairment of vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation to wage earning population in industries, factories and establishments.

The present upper ceiling on gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with implementation of 7th Central Pay Commission, in case of Government servants, the ceiling now is Rs. 20 Lakhs effective from 1.1.2016.

Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, the Government is of the view that the entitlement of gratuity should be revised for employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government initiated the process for amendment to Payment of Gratuity Act, 1972.

Retirement Gratuity Ceiling hiked to Rs.20 lakh for bank employees and officers – AIBEA

7th CPC increased Gratuity Ceiling limit – 20 lakh from 1.1.2016

Payment of Gratuity (Amendment) Bill, 2017 : Increase maximum limit of gratuity in Private Sector

Similar Posts:

• 7th CPC increased Gratuity Ceiling limit – 20 lakh from 1.1.2016
• Upper Ceiling on Gratuity 20 Lakhs
• Gratuity ceiling raised to 20 Lakhs w.e.f. 29.3.2018
• TN Retirement Gratuity – Retirement and Death Gratuity from 1.1.2016
• Brief on Payment of Gratuity (Amendment) Act, 2018

Department of Heavy Industry has been receiving complaints of non-payment of gratuity and pay revision arrears by the Heavy Engineering Corporation (HEC), Ranchi to its retired employees. These complaints are forwarded to the Company for appropriate action and redressal of grievances.

As reported by HEC, twenty such complaints have been received by them through the Department during the last two years.

HEC has informed that the payment of gratuity to employees separated upto 31st March, 2014 has already been done except in a few deficient cases, due to specific technical reasons. Outstanding liabilities on account of gratuity payable to retired employees are Rs.50.28 crore. The same hasn’t been paid due to acute financial crisis faced by the Company. However, in case of daughter’s marriage, medical treatment of self and spouse, children’s higher education and remittance of bank’s outstanding loans, part payment of gratuity to ex-employees is being done, as per availability of funds. Regarding the payment of arrears on account of wage revision 1992 & 2007, a total of Rs.3.71 crore and Rs.24.70 crore (Approx.) respectively are outstanding.

HEC is a company registered under the Companies Act, with a separate legal identity under the Law. The Company is primarily responsible for managing all its affairs independently including meeting expenses related to its employees. Government of India being promoter of the company, has provided financial assistance to the Company in past from time to time in the form of loan, with a view to mitigate the hardship faced by their retired employees due to non-payment of gratuity timely. In the year 2014-15, a loan of Rs.47.89 crore was provided to the company for settlement of outstanding statutory dues (like gratuity etc.) of its employees.

This information was given by Minister of State in the Ministry of Heavy Industries and Public Enterprises Shri Babul Supriyo in reply to a written question in the Lok Sabha today.

Source: PIB News

Similar Posts:

• TN Pension Arrears : Arrears on Retirement Benefits form Jan 2016 to Sep 2017
• Brief on Payment of Gratuity (Amendment) Act, 2018
• TN Retirement Gratuity – Retirement and Death Gratuity from 1.1.2016
• Mode of payment of arrears of pay- 7th CPC – Revised Pay Rules, 2016
• Cabinet approves Revision of pension of BSNL Pensioners Removing Anomalies