Terminal benefits
All financial benefits under this head is given to an employee who retires on attaining the age of superannuation or other means of retirement as the case may be.
Superannuation is a terms refers to attaining the age of 60 years. Hence, retirement and superannuation both having different meanings. Generally, on retirement, following benefits are paid to the employee and the same are required to be discussed. All terms discussed below is regulated by – Central Civil Services (Pension) Rule 1972. The same is available here (Please click on the link) – https://persmin.gov.in/pension/rules/ccspen1.htm
1 Pension
1.1 Pension is admissible to permanent Government employee who – (a) retires or is retired with a qualifying service of not less than 10 years. (b) Employee who voluntarily (VRS) retires after 20 years of service.
1.2 There are different classes of pension – (a) Superannuation pension on retirement on superannuation (on attaining the age of 60 years) [Rule 35], (b) Retiring pension in case of VRS or premature retirement before superannuation (before 60 years) [Rule 36], (c) Pension on absorption consequent upon conversion of a Government department into a Central Autonomous Body or a Public Sector Undertaking [Rule 37A], (d) Invalid pension on retirement after being declared incapacitated for further service by the competent medical authority [Rule 38], (e) Compensation pension on selection for discharge owing to the abolition of his/her permanent post and provision of alternate employment of equal status is not possible, or offer of a lower post is not accepted [Rule 39], (f) Compulsory retirement pension on compulsory retirement as a measure of penalty [Rule 40], (g) Compassionate allowance on dismissal or removal in a case deserving of special consideration. This is also pension restricted to 2/3 of Compensation pension [Rule 41].
1.3 The minimum amount of any class of pension will be Rs. 9,000 per month with effect from 01/01/2016 and maximum will be 50% of the highest pay in the Government [Rule 49].
1.4 Preparation of pension papers are required to be done one year well in advance of the date of retirement/superannuation. Verification of service and all particulars required in Form 7. The responsibility lies upon Head of Office.
1.5 Before the 8 months from the date of retirement/superannuation, Head of Office is required to mandatorily furnish a certificate regarding – (a) the length of qualifying service which is proposed to be taken into account for pension and gratuity (b) emoluments and average emoluments proposed to be reckoned with for retirement gratuity and pension. A form 5 is also to be forwarded to the employee and advise him to return the same duly completed not later than 6 months from his/her retirement/superannuation.
1.6 All connected papers with form 5 and 7 along with Service records & ‘Pension Calculation Sheet’ in triplicate are required to be furnished before Accounts Office before 4 months before the retirement/superannuation. The responsibility lies upon Head of Office.
1.7 Aadhaar Number is required to be mentioned in form 5 and 7 [Rule 61].
1.8 The pension cases are mandatorily be processed through ‘Bhavishya’. In this process pension cases are processed and generated through the Pension module in COMPACT till the Public Financial Management System (PFMS) is made operational and integrated with Bhavishya [Rule 61].
1.9 Pensioners are required to submit three copies of photographs while submitting pension forms through ‘Bhavishya’.
1.10 The pensioner’s copy of PPO is to be handed over to him/her at the time of retirement/superannuation.
1.11 Calculation of pension: Full pension is calculated – (a) 50% of average of basic salary of last 10 months or 50 % of basic salary, whichever is beneficial subject to minimum of Rs. 9,000 per month and 50% of the highest pay in the Government [Rule 49(2)].
1.12 Additional quantum of pension is paid as per the table detailed below:-
|
Age of pensioner
|
Additional quantum of pension
|
|
80 years to less than 85 years
|
20% of basic pension
|
|
85 years to less than 90 years
|
30% of basic pension
|
|
90 years to less than 95 years
|
40% of basic pension
|
|
95 years to less than 100 years
|
50% of basic pension
|
|
100 years or more
|
100% of basic pension
|
The amount of fraction is rounded off to the next higher rupee during the course of fixation of pension [Rule 49 & 54].
1.13 Pension is disbursed through – (a) Treasuries, (b) Pay & Accounts Office, (c) Post Offices & (d) Selected Nationalized Banks.
2 Commutation of Pension
2.1 Every pensioner is eligible for commutation of his monthly pension upto 40% (maximum 40% w.e.f. 01/101/1996) of his pension provided that he/she is not under any departmental or judicial proceedings [Rule 4 & 5]. Any faction in the amount offered for commutation will be ignored.
2.2 Commutation of kind of pension is allowed without undergoing medical examination if it is applied before the expiry of one year reckoned from – (a) date of Superannuation, Retiring pension, Compensation pension, (b) date of issue of retirement orders in case of pension on absorption, (c) the date of issue of order in case of pension granted on finalization of departmental/judicial proceeding – [Rule 12].
2.3 Commutation of pension is allowed after medical examination if declared fit for – (a) retired on invalidation, (b) retired compulsorily as a measure of penalty, (c) in receipt of compassionate allowance, & (d) all pensioners applying for commutation after one year from the date of retirement – [Rule 18].
2.4 Competent Medical Authority – (a) Medical Officer not below the rank of Civil Surgeon or a District Medical Officer. (b) Medical Board – (i) Commutation of invalid pension (ii) in all cases of a second medical examination for commutation of pension – [Rule 22].
2.5 Withdrawal of application for commutation – (a) Before medical examination (b) Even after medical examination, if pensioner declines to accept addition to actual age directed in the medical report, within 14 days of it’s receipt, (c) Treated as withdrawn if pensioner fails to take the medical examination – [Rule 24 & 28].
2.6 Second Medical Examination – (a) after one year from the date of first medical examination, (b) To be conducted if the pensioner applies against the verdict of first medical examination even within one year [Rule 26 & 27].
2.7 Commutation Table (Effective from 01/01/2006): Given at Para No. 2.15
2.8 Payment of commutation will be made by Head of Office [Rule 13 & 15].
2.9 Reduction of pension on commutation – (a) from the date of receipt of the commuted value, (b) at the end of three months after issue of authority for payment whichever is earlier. If pension is drawn through bank, reduction will be affected from the date of credit of the amount in Bank account.
2.10 When commutation request is made before the date of superannuation, the commuted value becomes payable on the following date of superannuation and accordingly reduction in pension becomes operative from the same date. If commuted value is not paid within the first month after superannuation, the difference of pension for the period between the day following the date of superannuation and the date preceding the date on which the commuted value is deemed to be have been paid and shall be authorized by the Accounts Officer [Rule 6].
2.11 If pension is revised then payment of difference of commutation amount is payable [Rule 10 & 32].
2.12 Nomination with application of commutation is required to be made and the commutation value will be paid in the event of pensioner’s death before receiving it. Nomination should be made one or more persons [Rule 7].
2.13 The commuted portion of pension is restored on the expiry of 15 years [Rule 10].
2.14 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.
2.15 The commutation factor :
3 Gratuity
3.1 Gratuity is a monetary benefit given by the employer to his employee at the time of retirement. It is a defined benefit plan where no contributions are made by the employee. Prior to 1972, there was no law where it was mandatory for the employer to pay it’s employee gratuity at the time of retirement. Different classes of gratuity is discussed below.
3.2 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 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.
3.3 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 (DA) 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 16.5 times the Basic Pay plus DA, subject to a maximum of Rs. 20 lakhs (This ceiling of Rs. 20 lakhs may be increased by 25% whenever DA rises by 50% – Rule 50).
3.4 Death Gratuity: It is admissible in the event of death while in service. It is paid in the following quantum:
|
S.No.
|
Length of Service
|
Quantum of Death Gratuity
|
|
1
|
Less than one year
|
2 times of monthly emoluments
|
|
2
|
One year or more but less than 5 years
|
6 times of monthly emoluments
|
|
3
|
5 years of more but less than 11 years
|
12 times of monthly emoluments |
|
4
|
11 years of more but less than 20 years
|
20 times of monthly emoluments
|
|
5
|
20 years or more
|
Half month of emoluments for every complete six monthly period of qualifying service restricted to maximum of 33 times of emoluments.
|
|
Emoluments includes: (a) Basic salary & (d) DA against last pay drawn.
|
3.5 Residuary Gratuity: When an employee dies within 5 years after retirement, and the total amount actually received by him on account of – (a) pension/service gratuity, (b) Dearness Relief on pension, (c) Retirement gratuity and (d) commutation of pension amount is less than 12 times the emoluments drawn at the time of retirement then the deficiency is granted to him nominee is called Residuary Gratuity [Rule 50 (2)].
4 Leave encashment
4.1 Encashment of leave is a benefit granted under the CCS (Leave) Rules and is not a pensionary benefit. Encashment of Earned Leave (EL) & Half Pay Leave (HPL) maximum upto Leave salary equivalent to 300 days is allowed if the same is credited in pensioner’s leave account as the case may be. Leave encashment is made by taking into account the basic salary of last month salary paid and amount of Dearness Allowance (DA) in force. The same can easily be understood by the following example:
|
Case-I
|
EL at credit
|
HPL at credit
|
Leave encashment allowed
|
|
300 or more
|
Any amount
|
Leave salary equivalent to 300 days.
|
|
Case-II
|
250
|
50 ore more
|
Leave salary equivalent to 275 days as 50 HPL has half pay value.
|
|
Leave encashment is paid accordingly as per EL & HPL at credit.
|
5 CGEIGS
5.1 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.
5.2 CGEIGS monthly subscription can’t be intermitted in any circumstances. If intermitted, the arrears of subscription shall be deducted.
6 Dearness Relief (DR)
6.1 An additional amount which is equal to percentage which is announced from time to time called Dearness Relief (DR) is paid to Pensioners on his/her pension fixed to compensate for the increase in cost of living twice in a year in the same manner, Dearness Allowance (DA) is paid to serving employee. DR & DF are same terms granted to serving and pensioners respectively. The quantum of percentage is almost equal.
6.2 Dearness Relief (DR) is admissible on original pension before commutation (Whether commutation of pension is adopted or not) and also the additional pension/family pension based on the old age.
6.3 Any fraction of rupee shall be rounded off to the next higher rupee while granting to the pensioner.
6.4 It is enhanced by the Government twice in a year – (a) 1st January (generally announced in the month of March) & (b) 1st July (Generally announced in the month of September).
7 Family Pension
7.1 Family Pension is payable to the family of an employee/pensioner on his/her death in service or after retirement. Normal family pension is now at a uniform rate of 30% of last pay drawn, subject to a minimum of Rs. 9000 (w.e.f. 1.1.2016).
7.2 In the case of a missing Government servant/pensioner, family pension can be paid after a period of six months from the date of lodging an FIR with the police authorities.
7.3 Dependent parents and widowed/divorced daughter/unmarried daughter are now included in the definition of family for the purpose of consideration for grant of family pension.
7.4 A judicially separated spouse of the deceased Government servant with children can get family pension after the children cease to be eligible till his/her death/remarriage, whichever is earlier.
7.5 Family pension is also admissible to a posthumous child and also to children from the void or the voidable marriage as per the relevant provisions in the rules.
7.6 The rights of children from the void or voidable marriage require to be protected so, pensionary benefits will be granted to children of a deceased government servant/pensioner from such type of marriages. The share of the children from illegally wedded wife in the family pension shall be payable to them in the manner given under sub-rule 7(c) of Rule 54 of CCS (Pension) Rules 1972 along with the legally wedded wife.
7.8 In the event of death of a family pensioner, the arrears of family pension is automatically payable to the eligible member of the family next in line. Succession certificate for payment of the arrears is required only in such cases where there is no family member eligible to receive family pension after the death of the family pensioner subject to the provision contained in DOP&PW’s O.M. No. 1/22/2012-P&PW(E) dated 10.07.2013.
7.9 Higher rate of family pension is admissible, if the deceases had rendered not less than seven years’ continuous service. It is payable from the date following the date of death. The higher rate of Family Pension is not admissible to dependent parents and they are eligible only for the normal rate. The rate of higher family pension are – (a) In case of death while in service: Payable to the family of a Government servant for a period of ten years from the date following the date of death of a Government without any upper age-limit. (b) In the case of death after retirement: Payable for a period of seven years or up to the date on which he would have attained 67 years had he survived, whichever is less.
8 Pay Matrix
************
