The Government Pension Package
Government
pension is granted to a Government employee on his/her retirement from
Government service on the basis of length of qualifying service rendered
and amount of emoluments last drawn. In the case of appointment in the
public service, government fixes an age limit. In certain cases, this
age limit is relaxed. According to general recruitment rules, a person
can enter into Government service from minimum eighteen years’ age
provided that the person has requisite qualification for service.
A
citizen enters into service at young age for serving the people and for
the welfare of the country. He/She then spends the most valuable time
of his/her life in the service and ultimately at age of 60 years retires
from service because of old age. Being adjusted in routinized life
profile, it is difficult for a public employee to adjust with the other
occupations of the society after retirement. His/her capability of work
gets reduced.
In
most cases, he/she is no more in a position to pursue any other
occupation. Besides, many government officials become handicapped or
die because of this. His/her dependent family members face serious
financial setback. There is acute necessity of social security for the
handicapped alive retired Government employee or for the
dependents of the deceased employee.
At
this backdrop, the government has introduced a ‘pension package’ that
constitute of pension, gratuity, group insurance, provident fund and
medical allowance for the retired government employees and their
dependents. With this system the retired persons or their dependents do
not have to depend on others for their survival.
Types of Pension
According
to the existing laws, rules and regulations, public pension can be
classified into different types according to the nature of conclusion of
service.
Compensation Pension
When
a government employee is given pension after abolition of permanent
post held by him/her in the process of downsizing or abolishing of the
government establishment where the post was positioned, it is called
compensation pension.
A
government employee can claim compensation pension for his/her past
service. He/She is either appointed in new post or transferred to other
establishments. The procedure in providing this pension involves
preparation of a list of the officials losing their jobs at a minimum
expenditure of the government. The important point in this case is that
in abolishing the posts the income of the government has to be
increased. Again in this process the income of the government has to be
more than the amount of the compensation pension to be paid.
In
this process, if an employee is discharged from a post after completion
of service in terms of fixed service conditions, he/she cannot claim
any pension. For loss of any special pay, pension or compensation
allowance is not allowable.
.
In
the case of retrenchment of permanent employees, if notice, which is
necessary, is issued giving a time period of less than 3 months, in that
case proportional compensation is to be paid for the period falling
short of 3 months. If an employee is re employed and intends to return
the compensation, he/she can do so by intimating the issue to the
authority. But a temporary employee cannot do so.
.
Invalid Pension
If
a government employee’s service concludes due to his/her physical or
psychological invalidity he/she receives invalid pension. According to
the Service Rules, if a public employee applies for invalid pension
before attaining 60 years of age, the head of his/her office
of employment will process the sanction for the pension on the basis of
the medical certificate regarding invalidation of the employee.
The
employee shall be required to submit application for invalid pension in
prescribed form along with recommendations of concerned Medical Board
and relevant documents. Medical certificate in prescribed is an
essential requirement for invalid pension. The authority that will
grant invalid pension to an employee shall send a brief statement under
sealed cover to the health examining medical officer or to the Board
mentioning therein the information as to types of treatment taken by the
employee.
When
an employee applies for invalid pension and produces doctor’s
certificate, he/she will not be kept in service and no leave will be
granted. Moreover, there is no scope for re-employment after invalid
pension. In some cases invalid pension is not allowed. For example if an
employee is discharged from service for other reasons, then he/she will
not be given the pension despite providing medical certificate. If an
employee becomes invalid because of bad habit and irregularity, he/she
will not be entitled to the pension on invalid ground.
Superannuation Pension
When
a government employee’s service compulsorily concludes due to his/her
attaining certain age determined by law for retirement from government
service he/she becomes entitled to superannuation pension. The
retirement age of employee is 60 according to the rule.
Retiring Pension
According
to the law of the country, the government may, if it considers
necessary in the public interest to do so, retire a public employee from
service at any time after he/she has completed 20years of service
without assigning any reason.
But
any other appointing authority is not authorized to exercise this
power. If any sub-ordinate appointing authority desires that an employee
employed by it should retire after 20 years of service, that authority
shall propose to the concerned ministry to that effect.
Optional Pension
A
government servant has unqualified right to opt to retire from service
at any time after He/she has completed 25 years of service upon the only
condition that she/he shall have to give a notice in writing to the
appointing authority at least 90 days prior to the date of his/her
intended retirement.
In
this case, the government is bound to accept the application and has no
legal scope to refuse.But such option once exercised shall be final and
shall not be permitted to be modified or withdrawn.
Family Pension
When
pension is sanctioned to the family of a pensioner/employee on his/her
death, it is called family pension. In the case of family pension, a
government servant while remaining in service at any time afterwards may
nominate one or more members of his/her family as successor for the
whole or part of his/her family pension.
But
in the absence of nomination and if the wife of the deceased pensioner
or any member of the family is not available, his/her last controlling
authority shall decide the successor for providing family pension and
gratuity. However, it is mentioned that the rules for family pension are
different for different members nominated.
Pension Benefits
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 superannuation pension on completion of at
least 10 years of qualifying service.
In
the case of Family Pension the widow is eligible to receive pension on
death of her spouse after completion of one year of continuous service
or before even 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 average emoluments
namely, the average of the basic pay drawn during the last 10 months of
the service or last basic pay drawn whichever is beneficial. Full
pension with 10/20 years of qualifying service is 50% of the average
emoluments or last basic pay drawn whichever is beneficial. Before
1.1.2006, for qualifying service of less than 33 years, amount of
pension was proportionate to the actual qualifying service broken into
completed half-year periods. For example, if total qualifying service is
30 years and 4 months (i.e. 61 half-year periods), pension will be
calculated as under:-
Pension amount = R/2(X)61/66
where R represents
average reckonable emoluments for last 10 months of qualifying service
or the last pay drawn as opted by the govt servant.
Minimum
pension presently is Rs. 3500 per month. Maximum limit on pension is
50% of the highest pay in the Government of India (presently Rs. 45,000)
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 with effect
from 1.1.1996. 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
constructed on an actuarial basis. 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 as
Annexure to this Deptt’s O.M. No. 38/37/08- P&PW(A) dated 2.9.2008
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 month’s Basic Pay plus Dearness Allowance
drawn before retirement for each completed six monthly period of
qualifying service. There is no minimum limit for the amount of
gratuity. The retirement gratuity payable is 16½ times the Basic Pay,
subject to a maximum of Rs. 10 lakhs.
Death Gratuity
This is a one-time lump sum benefit payable to the widow/widower or the
nominee of a permanent or a quasi-permanent or a temporary Government
servant, including CPF beneficiaries, 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:
Qualifying Service
|
Rate
|
Less than one year
|
2 times of basic pay
|
One year or more but less than 5 years
|
6 times of basic pay
|
5 years or more but less than 20 years
|
12 times of basic pay
|
20 years of more
|
Half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments.
|
Maximum amount of Death Gratuity admissible is Rs. 10 lakhs w.e.f. 1.1.2006
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 month’s basic pay last drawn for each
completed 6 monthly period of qualifying service. There is no minimum or
maximum monetary limit on the quantum. This one time lump sum payment
is distinct from and is paid over and above the retirement gratuity.
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.
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
subscriber’s emoluments and not more than his total emoluments. Rate of
interest on GPF accumulations with effect from 1.4.2009 is 8% compounded
annually and the rate of interest will vary according to notifications
of the Government. The Rules provide for drawal of advances/ withdrawals
from the Fund for specific purposes.
Deposit Linked Insurance Revised 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.
Leave Encashment
Encashment
of leave is a benefit granted under the CCS (Leave) Rules and 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. There is no
provision under the Rule for payment of interest on delayed payment of
Leave Encashment.
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 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. No interest is
payable on account of delayed payments under this Scheme.
Processing of pension papers
Numerous Paper-works
Although
an individual pension has to be sought through a single pension form,
numerous supporting documents are required at each step of pension
processing. These paper works deal with information on different aspects
of a government employee’s professional life.
In
case of a general retiring or superannuation pension, pension
application package of a gazetted or non-gazetted employee may include
upto 11-13 types of supporting documents besides the pension
application. The pension application package of a family pension case,
on the other hand, may include upto 16-18 types of supporting documents.
The
exact number of documents depends on whether the retiring public
employee lived in government accommodation at any point of service life
and whether he became a gazetted employee from non-gazetted employee.
There
is further paper-work required in order to secure each supporting
document.For collecting so many supporting documents, pension seekers
have to resort to different processing offices and deal with various
functionaries.
With
low level of transparency and accountability, the application files do
not move automatically without continuous persuasion.
So they
have to invest considerable time and energy that exhaust them both
physically and psychologically. It is more difficult for majority of the
pension seekers who are in old age and/or have travelled long way from
home. Their expenditure also multiplies accordingly in terms of travel,
food and accommodation.
Multiplicity of Processing Offices
In
each step of pension processing, pension seekers usually have to go to
different offices. Sometimes, even processing of a single document
involves more than one office. In the backdrop of a pension delivery
system that is already complex for various reasons, more processing
offices mean more harassment.
The
number of processing formalities and functionaries increases along
number of processing offices. This is a critical situation for pension
seekers.
They
might have many documents at hand to be processed from various
processing offices. Delays in processing of some documents ultimately
delay receiving of pension.
Processing
offices are generally located at distance from each other. Sometimes
they are situated at separate towns or districts.
This lead to increased incidental costs that exacerbate financial loss in securing pension.
Procedural Complexity
Scrutinisation
mechanism for pension applications of all kinds constitute of multiple
formalities and file-works. Processing works generally do not go
smoothly in horizontal manner. Rather it often takes a circular path. A
file is put through several rounds of scrutiny that leads to
duplication and overlapping of processing work. It often takes several
functionaries to verify one piece of information. Instead of dual or
multiple utilization of a single document, different
supporting documents are sought to verify different aspects of a pension
case.
Salary
drawing is a regular financial transaction between government and
employees. Salary record, therefore, is a critical component of a
employee’s service record. Due to its continuous change over whole
service period, salary record has to be regularly updated. But that
doesn’t happen with many employees due to complexities in related
procedures.
Ultimately,
their pensions get held up for incomplete service record.Another
manifestation of procedural complexity is provision of securing a No
Demand Certificate (NDC) from concerned housing, water and electricity
authorities.
Lack of Transparency and Accountability
Lack
of transparency and accountability of pension functionaries is a major
systemic cause of pension related harassment. Existing laws, rules and
regulations that guide pension have not sufficiently covered the issues
of transparency and accountability of pension delivery functionaries. It
is evident from the fact that there is no specific mechanism of lodging
complaint and getting remedies for pension seekers when they face
harassment
Pension
processing is not an independent function. It is generally tied to
developments in service history as much as to retirement and pension
seeking proceedings. Regular maintenance and updating of certain service
related documents have bearing on pension delivery.
The
other required documents have to be processed prior and during
retirement. But in most cases,pension documents and supporting documents
cannot be secured in short time. Again, when the documents are
delivered, they are often found incomplete or with mistakes that
necessitates reprocessing.
Because,
the existing pension delivery service is not based on reward and
punishment. It does not stipulate time-bound performance and
target-oriented disposal of assignments from pension delivery
functionaries. There is no fixed date for file put-up and disposal.
There is no monitoring and evaluation of pension service delivery.
The
service books of employees are maintained and updated by parent office.
Each entry into the service book should be verified by the D.D.O. The
verified information may have to be authenticated from concerned
Accounts Office.
All
these tasks, maintaining, updating, verifying and get authenticated are
responsibilities of the concerned functionaries of parent office. But
these responsibilities are not regularly discharged by them. Rather,
they often keep the service books unattended and complete the
formalities once in a couple of years.
In
this way, many retiring employees get audit objections or have their
pension process slowed because of incomplete service book/record.
Now question may arise, how salary bills are prepared and sanctioned without service book/record being updated?
They
are done through persuasion of Accounts Office functionaries by
employees.. The employees on the other hand do not bother since their
salary payment is uninterrupted. But they get into trouble during
retirement as they duly face audit objection.
Shortfalls regarding Pension Laws, Rules and Regulations
There
are shortfalls with pension related laws, rules and regulations that
induce harassment.Loopholes in rules and regulations that pension often
create scopes of rent-seeking and harassment.
Again,
existing regulations are not always properly implemented.
Furthermore,extra-legal development in one’s service history, that he
didn’t have any control over, affects his pension prospect.
Both
gazetted and non-gazetted employees who work in transferable position,
who haven’t worked in single station but in different stations, face
more difficulty in pension processing due to non-implementation of
regulation. Because, as an employee is transferred from one station
to another, his service record/book, Last Pay Certificate (LPC), leave
account etc. are not often simultaneously sent.
Although that is provided by existing regulation, it is not honoured in most cases.
The
original service book of an employee is opened in the station where he
joined service. As he is transferred, pages from his service record
should be copied and sent to the new station while the original will
stay in that station.
But
this is sometimes lapsed. May be only LPC is sent but not service
record/book and other documents. The urgency of sending LPC is more both
on the parts of employee and concerned D.D.O. of parent office as it is
immediately required for getting salary.
Those
that are required in the long run, as in pension processing,
service record/book etc. are not often sent timely or sent at all.
Each government establishment can properly maintain and regularly update two copies of service books for employees.
One
copy should be with the employees and the other copy may be with parent
office authority. The service books should be updated of each year. If
they are not updated within that time, concerned administrative
authority should take punitive measures against the responsible
personnel. Backlog in updating service books is still rampant and no
responsible person has so far been hard of getting punishment.
Each
government establishment can prepare list of subordinate employees who
will retire in next calendar year that may be updated in quarterly
basis. The list should be distributed among concerned controlling
officers, accounts officers and Directorate of Accommodation (in case
of the residents of government accommodation) at least a year prior to
retirement. This practice is still not regular among government
establishments.
Poor Record Management
Pension
seekers acutely suffer from poor record management in government
establishments.This is common place from macro level of
ministry/division/department/directorate to micro level of individual
subordinate offices.
Some
of the key pension related documents that include, most importantly,
service record/book are maintained by the pensioners’ parent offices or
concerned accounts offices. But these documents are not regularly
maintained and updated.
Consequently,
during retirement, pension processing of many employees get
obstructed over incomplete or mistake-laden service record/book. This
also creates risk of loss in pension payments over mistakes in service
period, salary increment, leave balance etc.
Delay in pension processing may be sorted out when paper works and Processing Stages will be reduced.
Ensuring
Transparency and Accountability should be maintained and proper
Implementation of Rules and Regulations of pension is the possible
remedy to this problem against the above factors.
Courtesy : http://tkbsen.com/
----------------------
