Retirement Benefits

INTRODUCTION

Every staff member of the Institute at some time or the other must know what his retirement benefits are going to be when he retires after a fruitful stay. An effort has been made to compile the necessary information so that the employee would know the vari­ous benefits, how to calculate them, what constitutes qualifying serv­ice for pension, details of family pension and so on.

Please note that this is not a legal document but only an effort to bring to the attention of IIA staff some information that may be useful on Pension. Nothing contained in this document is a commitment on behalf of IIA/DST. For detailed and authentic information CCS Pension Rules / Swamy's Handbook must be consulted.

With this background in view, let us now see the Retirement benefits in detail.

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RETIREMENT BENEFITS

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ENTITLEMENTS ON DEATH

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BENEFITS ON RESIGNATION

  • 1. Terminal Leave
  • 2. Group Insurance Savings Fund
  • 3. Final payment of GPF

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PENSION

Pension is an old age assistance or contribution on the part of the Government intended to supplement the Government servant'own savings towards subsistence at his old age. Thus an employee governed by the existing Pension scheme gets a recurring monthly Income for life and a lump sum gratuity at the time of his retirement, both calculated with reference to the length of his service and the emoluments drawn. Pension is payable in recognition of the past service rendered by the Government servant.

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Basic conditions for earning

  • 1. Confirmation or successful completion of probation.
  • 2. 10 years qualifying service on the date of retirement.
  • 3. Future good conduct.

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Qualifying service

The amount of pension is based on two factors namely (i) The length of qualifying service and (ii) the average emoluments actually drawn.

Broadly speaking qualifying service commences from the date of his regular employment in Government service till the date of his retirement. All period spent on duty including deputation / foreign service for which contribution is paid
qualifies for pension.

Conditions a service to qualify for pension:

  • 1. The duties and pay and allowances should have been regulated by Central Government.
  • 2. The service must be paid from the Consolidated Fund of India .
  • 3. The service must be in a pensionable establishment.

Various types of services which qualify for pensionary benefits

  • 1. Service as probationer or on probation.
  • 2. State Government service.
  • 3. Service rendered in another autonomous body.
  • 4. Half of the service paid from contingencies.
  • 5. Pre-retirement civil service in case of re-employed Govt.servanton compensation or invalid pension.
  • 6. Period spent on training.
  • 7. Military service rendered before civil employment.
  • 8. Foreign service subject to discharge of pensionary liability.
  • 9. Period of deputation to UNO.
  • 10. Following kinds of leave counts as qualifying service:
    • a. All leave for which leave salary is payable.
    • b. EOL on medical certificate.
    • c. EOL without M.C taken for prosecuting higher scientific / technical studies or due to inability of the Government servant to rejoin duty on account civil commotion.
  • 11. Period of suspension will count for pension if the Govt. servant is fully exonerated from the charges or the suspension is held to be wholly unjustified. In all other cases the period of suspension normally does not qualify for pension unless the Competent Authority declares otherwise.

Periods do not count:

  • (i) Boy service (service rendered before attaining 18 years of age).
    (ii) Service as Apprentice (except SAS Apprentice).
    (iii) Overstay, periods of suspension and other interruptions declared as not qualifying.
    (iv) Extraordinary leave without M.C.
    (v) Periods treated as =E2=80=9Cdies non=E2=80=9D.

Addition to qualifying service:

The Government may allow a Government servant to add to his service qualifying for superannuation pension (not for other kind of pension) the actual period but not exceeding one-fourth of the length of his service or the actual period by which his age at the time of recruitment exceed 25 years or a period of 5 years, whichever is least in the
following cases:

  • a) The service or post should be one for which post-graduate research or specialist qualification or experience in scientific, technological or professional fields are essential and for which candidates of more than 25 years of age are normally recruited.
    b) The Recruitment Rules of the service or post contain a specific provision which carries the benefit of this Rule.
    c) The Govt. servant should have completed atleast 10 years qualifying service at the time of his retirement.

Similarly on Voluntary Retirement the Govt. servant is eligible for a maximum weightage of 5 years subject to the following conditions:
The total qualifying service including the weightage should not exceed 33 years; and
The period should not go beyond his normal date of superannuation.

Calculation of fraction of a year:

Qualifying service is expressed in terms of completed six monthly periods. For this purpose, fraction of a year in the qualifying service should be reckoned as follows:

Fraction of a year No.of completed six monthly period
Less than three months Nil(ignored)
Three months and above but below nine months One six monthly period
Nine months and above two six monthly period or one year

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Average Emoluments:

Pension is based on the average of the emoluments which a Government servant had drawn during the last 10 months of his service. It includes basic pay, stagnation increment and non-practicing allowance in respect of doctor.

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Pension calculation:

Pension is calculated at 50% of average emoluments for a maximum qualifying service of 33 years subject to a minimum of Rs.1275/ - p.m and a maximum of RS.15000/- p.m.

However, when the qualifying service of a Government servant at the time of his retirement is less than 33 years, pro-rata pension will be sanctioned subject however to the minimum pension of RS.1275/ - p.m.
The amount of monthly pension / gratuity / commutation of pension shall be expressed in whole rupees and fraction of a rupee shall be rounded off to the next higher rupee.

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Various kinds of pension

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Superannuation Pension

It is granted to a Government servant who retires on attaining superannuation which is 60 years. A Govt. servant retires on attaining superannuation on the last day of the month in which he attains the age of 60 years.

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Retiring Pension:

It is granted when a Government servant retires or is retired from service in advance of the age of retirement by giving 3 months notice or pay in lieu of such notice on completion of 30 years of qualifying service or on attaining the age of 50/55 years subject to certain conditions.

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Voluntary Retirement Pension

  • 1. On completion of 20 years of qualifying service by giving a notice of 3 months in writing, a Government servant can avail voluntary retirement. A weightage of upto 5 years can be given subject to the following stipulations:
    • a. By giving weightage the total qualifying service should not exceed 33 years
      b. By giving weightage, his age of retirement, should not exceed the normal date of superannuation

    2. If you are declared surplus and opt for Voluntary Retirement under Rule 29 of CCS (Pension) Rules.

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Invalid Pension

It is granted when a Government servant has been declared by the competent medical authority to be permanently incapacitated for further service.

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Compensation Pension

It is granted when a Government servant has been discharged owing to abolition of permanent post and alternative post of equal rank is not available or offer of a lower post of equal rank is not available or offer of a lower post is not acceptable to the Govt. servant.

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Compulsory Retirement Pension

It is sanctioned to a Government servant who has been retired compulsorily as a measure of penalty. The amount of pension is not less than two-third and not morethan full Compensation Pension admissible on the date of his. compulsory retirement.

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Compassionate Allowance

When a Government servant is dismissed or removed from service normally he forfeits his claim for pension or gratuity or both. But the authority who is competent to dismiss or remove him may grant him a compassionate allowance, if his case deserves special consideration which should not exceed 2/3rd of pension or gratuity or both.

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Pension on absorption in or under a corporation, body or company:

When Government servant has been permitted to be absorbed in or under a Corporation or Body or Company wholly or substantially owned or controlled by Government, and if such absorption is declared to be under public interest, he will be permitted to retire and paid his pensionary benefits.

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Dearness relief on pension :

All pensioners are eligible for Dearness relief which is sanctioned as compensation against price rise. DR is sanctioned like DA and revised on 1st January and 1st July based on the average consumer price index figure during the preceding 12 months. If a pensioner receives more than one pension, DR will be calculated on the total amount of all pension taken together. Pensioners who are employed in Central or State Government or PSU or AB or RBI, PSB, LlC/GICs are not eligible for dearness relief.
The expected rate of DR from 1.1.99 will be 32% of pension.

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GRATUITY

Gratuity is a lump sum amount payable either on retirement or in the event of death while in service to the family of the deceased Government servant. The quantum is based on the length of qualifying service and the last pay drawn including D.A.
Gratuity is divided into four categories namely:

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Service Gratuity:

Pension is admissible in case the Government servant has rendered a qualifying service of 10 years or more at the time of his retirement. In case, the qualifying service of a Government servant is less than 10 years at the time of his retirement he is not eligible for pension but service gratuity in lieu thereof at the rate of 1 month of emoluments for every
completed year of service. This is payable in addition to the retirement gratuity.

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Retirement Gratuity

This is admissible in addition to service gratuity/pension where the qualifying service of Government servant is 5 years or more at the time of their retirement. The rate of gratuity is one-fourth of the emoluments for each completed half year of service subject to a maximum of 16 1/2 times of emoluments or RS.3.50 lakhs which ever is less. Government dues can be recovered from Gratuity but exempted from I.T and court attachment.

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Commutation of Pension

A pensioner is entitled to receive a lump sum amount by surrendering a portion upto 40% of his pension and this is known as commutation of pension. In arriving the amount of pension to be commuted, fraction of a rupee shall be ignored. The monthly pension will be reduced by the amount commuted but the dearness relief will be on the basis of original pension (i.e. pension before commutation) Commutation amount is exempted from income tax. The amount commuted will be restored, after 15 years if the pensioner is alive.

Calculation of Commutation Amount

The lump sum payable shall be calculated as follows:

Amount offered for commutation X 12 X Commutation factor

Commutation Table

Age of next birthday

Commutation factor

Calculation

Commutation Value

50

13.25

800 X 13.25 X 12

127200

51

12.95

800 X 12.66 X 12

121536

52

12.66

53

12.35

54

12.05

55

11.73

56

11.42

800 X 11.42 X 12

106560

57

11.10

58

10.78

800 X 10.78 X 12

 

103488

59

10.46

800 X 10.46 X 12

100416

60

10.13

61

9.81

800 X 9.81 X 12

94176

62

9.48

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Leave Encashment

Cash equivalent of leave salary including D.A is payable in respect of E.L at credit on the date of retirement subject to a maximum of 300 days.

Method of calculation of Leave Encashment:

Pay D.A on the date of retirement

 

30

X

No. of days of EL at credit (subject to a maximum of 300 days)

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Group Insurance - Savings Fund

The accumulations under Savings Fund together with interest is payable on retirement / cessation from service.

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T.A to the place of settlement

On retirement, the Government servant is entitled to T.A to the place of settlement as detailed below:

  • 1. Lump sum Composite Transfer Grant equal to one-month's basic pay.
  • 2. Actual fare in the entitled class - self and family.
  • 3. Air fare for eligible officers subject to production of actual travel ticket.
  • 4. Cost of transportation of personal effects.
  • 5. Cost of transporting conveyance like motor car / scooter.

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Retention of staff quarters

  • 1. For first two months: on payment of normal L.F.
    2. For next two months: Two times of normal L.F.
    3. For next two months: Four times the L.F.
    4. For next two months: Six times the L.F.

Retention beyond four months will be on medical/educational grounds on producing necessary proof.

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Compassionate Appointment of dependants

If a Government servant is permanently incapacitated for further service on medical grounds and have retired from service on invalidation, compassionate appointment of spouse/son/daughter may be considered. To be eligible for this benefit the Govt. servant should have retired before attaining 55 years (57 years for Group 'D') and the department is satisfied that the condition of the family is indigent and in great distress after taking into account all the pensionary benefits received.

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Final payment of GPF

On retirement the entire accumulations at the PF account of the individual along with the accrued interest is payable.

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CEAFTuition fees/Hostel Subsidy

CEA/TF/Hostel subsidy is payable till the end of the academic year in case of retirement during the middle of the academic session.

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New Telephone connection

Senior officers of Central Govt./State Govt. on their retirement are entitled to register for new telephone connection under Non-OYTSS category subject to drawal of basic pay of Rs. 3700/- p.m (pre revised)

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ENTITLEMENTS ON DEATH

Immediate Relief :
If an employee dies while in service, his family shall be eligible for immediate monetary relief of Rs.2500/- in the form of an advance. It is sanctioned by Head of Office. This amount will be recovered either from arrears of pay and allowances or from death gratuity or PF final settlement.

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Death Gratuity

It is payable in the event of death of a Government servant while in service at the following rates:

Rate of death gratuity
(i)Less than one year times of emoluments
(ii)One year or more but less than 5 years. times of emoluments
(iii)5 years or more but less than 20 years 12 times of emoluments
(iv)20 years or more Half of the emoluments for every six monthly period (1 month for every year of service) subject to maximum of 33 times of emolument

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Residuary Gratuity

Death gratuity payable in the event of death of a Government servant while in service after completion of 5 years qualifying service is 12 times of emoluments which he was getting at the time of death but there is no such minimum in the retirement gratuity. If a Government servant dies within 5 years from the date of his retirement and the sum actually received by him at the time of his death on account of pension or service gratuity and retirement gratuity including commuted value of pension is less than 12 times of his emoluments, the deficiency, known as retirement gratuity is payable to his nominee or heirs.

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Family Pension scheme of 1964 :

Under this scheme, family pension is payable on the death of the Govt. servant either "in service" or "after retirement"

There is no minimum service requirement. Family Pension is admissible to the family of a deceased Govt. servant even if he has rendered one day service on the date of his death provided he has been medically examined and found fit for appointment in Government service.

Family Pension is calculated at a uniform rate of 30% of last pay drawn.

If the deceased employee has rendered 7 years service on the date of his death, enhanced family pension is payable for a 7-year period from the date following the date of death or till the date on which the deceased employee would have attained 65 years of age, whichever is earlier.

The rates of enhanced family pension are

  • a) In case of death in service:
    Twice the amount of normal rate of family pension or 50% of last pay drawn whichever is less.
    b) In the case of death after retirement:
    50% of pay drawn at the time of retirement; or amount of pension authorized on retirement, whichever is less. Minimum family pension payable is Rs.1275/- p.m and Maximum family pension payable is Rs.9000/-p.m.

Family pension is payable to only one member of the family at a time in the following order:

  • 1) Widow or widower, as the case may be up to the date of remarriage or death
    2) When (1) becomes ineligible, eligible children below 25 years of age in the order of their seniority till they attain 25 years or marriage or earning their livelihood whichever is earlier.
    3) After (1) and (2) above, for the life time to any unemployed son / daughter who is suffering from any disorder or disability of mind / physically disabled or crippled.

If the spouse is also a Govt. servant, family pension is payable to the spouse in addition to his/her salary / pension. On the death of the other spouse the eligible children will get two family pensions.

Family pension is normally payableto only one person at a 1ime. But when the deceased Govt. servant is survived by more than one widow, it will be shared equally between them.

Similarly between a widow and eligible child through another deceased wife or between eligible child of deceased wives.

Family pension is also payable to the dependant parents. Family Pension is payable to twin children in equal shares.

Dearness Relief on family pension is admissible at the same rate and on the same conditions as for pensioners but not to an employed spouse in Central or State Governments / PSCs or Banks or LlC.

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Leave Encashment

In the event of death of a Govt. servant while in service, cash equivalent of leave salary for earned leave at his credit will be paid to his family as in the case of retirement upto a maximum of 300 days.

Group Insurance - Savings Fund and Insurance Cover

If a Govt. servant covered by the Central Govt. Group Insurance Scheme dies while in service his family shall be given Insurance cover amount as detailed below:

Group Amount (Govt.) Amount(IIA) This is in addition Savings fund accumulation
A Rs.1,20,000 1,20,000
B Rs. 60,000 90,000
C Rs. 30,000 60,000
D Rs. 15,000 30,000

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G.P.F and Deposited-Linked Insurance Amount

The amount standing at the credit of the deceased Govt. servant on the date of his death along with the accrued interest shall be paid to the nominee or legal heirs.

Besides additional payment under the Deposit-Linked Insurance Scheme is also admissible under the following conditions:

  • 1) The additional amount payable shall be equal to the average balance in the account during the period of 36 months preceding the month of death of Govt. servant subject to a maximum of Rs.30,000/-.
    2) The deceased Government servant should have rendered minimum of 5 years service.
    3) The balance at credit should not fall below the prescribed limits at any time during the 3 years preceding the month of death of Govt. servant.
    If the Govt. servant has held for the greater part of the period of 3 years,a post on the higher grade Monthly minimum balance limit
    Group 'A' Rs. 12000
    Group 'B' Rs. 7500
    Group 'C' Rs. 4500
    Group 'D' Rs. 3000

    4. The maximum limit is applied after arriving at the average of 36 months and not at every stage

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Grant Compassionate Fund

This fund is to provide relief to the surviving families only on deserving cases where the family is left in indigent circumstances.
Prescribed guidelines are:

  • i)The deceased Government servant should be a meritorious employee: special consideration for unusually meritorious service.
  • ii)Death due to or accelerated by special devotion to duty will establish a claim for consideration.
  • iii)Preference to
    (a) dependants of officers with long years of service
    (b) other things being equal dependants of those who had been in the lower pay range.
  • iv)Families of retired officials are normally ineligible.

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Nature and amount of grant

It can be a recurring grant in the form of educational assistance for minor children or lump sum grant in exceptional circumstances but the total benefit should not exceed Rs.100001.

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Retention of quarters

On the death of a Govt. servant in harness the quarters occupied by him can be retained by his family for a period of twelve months on payment of normal licence fee.

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Allotment of quarters to dependant

When a Govt. servant in occupation of a Govt. quarters, dies in service hislher eligible dependant may be allotted accommodation on ad-hoc basis subject to these conditions:

  • 1) The dependant should be a servant eligible for allotment of Govt.
  • 2) The dependant employee should have resided with the deceased Govt. servant for a minimum of six months
    prior to the date of his death.
  • 3) The deceased Govt. servant or the dependant in whose case adhoc allotment of Govt. residence is proposed to be made, should not own a house/plot at the place of posting.
  • 4) All outstanding dues in respect of the quarters occupied by the deceased Govt. servant should have been
    completely cleared.
  • 5) The eligible dependant will be allotted accommodation one type below his normal entitlement.

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T.A to place of settlement:
The family of deceased Govt. servant is eligible for T.A to the place of their settlement which constitutes lump sum grant, actual fare, cost of transportation of personal goods,private conveyance as in the case of retirement.

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Compassionate Appointment of Dependant

As in the case of retirement compassionate appointment of eligible family member of the deceased Govt. servant for Group 'C' or Group '0' post may be considered.

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CEAlTuition fee/Hostel subsidy

On the death of a Govt. servant in service, the CEA/RTF or Hostel subsidy shall be admissible to his children for a limited period provided the spouse is not employed in Govt. or other similar institution.

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New Telephone connection

As in the case of retirement, the spouse of the deceased Government servant is eligible for allotment of New Telephone connection.

If a Government servant absconds, leaving the family and his where abouts are not known, then what happens to the family If a Govt. servant suddenly disappears leaving his family and his whereabouts are not known, the family may be paid in the first instance, the salary due, leave encashment and the amount of GPF having regard to the nominations made by the Govt. servant. After a lapse of one year the other benefits like death gratuity, family pension, may also be granted to the family subject to fulfillment of the following conditions:
i)The family must lodge a complaint with the concerned police station and obtain a report that the employee has not been traced after all efforts made by the police.
ii)An indemnity bond should be taken from the nominee / dependants of the employee that all payments should be adjusted against the dues to the employee in case he appears on the screen and makes any claim later.br>
iii)Similarly all dues outstanding against the Govt. servant should be recovered.
iv)Disbursement of gratuity should be effected within 3 months of the date of application, which should be submitted to the Head of Office after one year from the date of disappearance of the Govt. servant.

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Nominations and Checklist

Six months prior to your date of retirement you should file the following nominations with the administration and observe some important points noted below :
Nomination form for arrears of pension.Nomination form for commutation of pension.Application form for commutation of pension.Nomination form for Retirement / Death gratuity.Form of application for grant of family pension.Form of application for grant of retirement /Death gratuity.Form of acknowledgement for sanction of pension/ gratuity. Form of acknowledgement for sanction of commutation of pension.Certificate of employment.Forms of specimen signature.Description roll form duly attested.3 copies of joint passport size photograph (husband and wife) duly attested.
Declaration regarding receipt of any other pension.

Please do not avail EOL on P.A as this will reduce your O/S.Conserve your EL up to 300 days as you can encash it fully.As Average Emoluments determines pension,please do not allow it to come down during last 10 months of your service.Make sure that you transfer all items of stores which are listed in your PIR.Obtain from administration NDC and file it in advance.If you are in occupation of quarters and if you want to retain for some more time make out an application in advance. Open an account in any Public Sector Bank, only in your name, as pension cannot be credited to joint account. Collect first pension from office and in the successive months it will be directly
credited to your account.

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How to claim pension:

Head of Office is responsible for settling the claims pertaining to retirement / death. This process has to start two years in advance of the retirement date. 8 months prior to the date of retirement, the govt. servant has to furnish certain information (like joint photo with wife/husband, familydetails, bank's name and branch from where he intends to draw his
pension) to Head of Office.

Pension is sanctioned by the Accounts Officer who will issue Pension Payment Order (PPO).

Normally family pension is also authorized in the PPO but this can be drawn only after the death of the pensioner.

For getting family pension, the dependant has to apply in Form 14 by enclosing a copy of the death certificate of the deceased pensioner. Pension can be received from the Pension Disbursing Authority or through Post Office Savings Bank Accounts or through Public Sector Banks.

For drawal of pension through Bank the individual has to open a savings or current account in any Nationalized Bank and the monthly pension including Dearness Relie will be credited on the last working day. Even arrears of pension revised pension / revised relief will be automatically credited to the pensioner's account.For thispurpose, the pensioner has to furnish the following certificates:
(i) Life certificate - every year in November.
(ii) Non-employment certificate
(iii) In the case of Class I Officer, declaration about the acceptance of commercial employment within 2 years of retirement.

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Investment of retirement benefits

Normally a Govt. servant on retirement gets the following lump sum benefits :
a) Retirement gratuity
b) Commutation of pension amount
c) Cash equivalent of leave salary
d) Savings Fund under Group Insurance
e) Final payment of GPF accumulation.

All retirement benefits are exempted from income tax except the monthly pension. On prudent investment in Government authorized securities like Tax free Deposit Scheme for retiring Government employees, 1989 with SBI or its subsidaries you can get exemption from Income Tax.

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Other instructions

Your PPO is a valuable document containing details of calculation sheets for qualifying service / average emoluments, pension, gratuity and family pension. This may be preserved safely. All pensions / gratuities and dearness relief are payable in whole rupees. No employee can draw two pension in the same service but there is no bar in drawing more than one pension on account of civil and military service as well as for different employment. Grant of pension and its continuance is subject to the future good conduct of the pensioners. Pension cannot be attached, seized etc., but when the pensioner is found guilty of grave misconduct, pension may be withheld or withdrawn fully or partly for a specified or indefinite period.

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Last updated on: February 20, 2024