Railways revises Child Fare Rule : New provision will come into effect from April, 2016

Ministry of Railways revises Child Fare Rule : New provision will come into effect from April, 2016

Ministry of Railways has decided to revise the child fare rule. Under the revised provision, full adult fare will be charged for children of age 5 years and under 12 years of age if for whom berth/seat (in reserved class) is sought at the time of reservation. However, in case berth/seat is not sought for the children of age 5 years and under 12 years of age at the time of reservation, then half of the adult fare shall continue to be charged subject to the minimum distance for charging.

Necessary changes shall be carried in the reservation form so that the passenger can indicate their option for requirement of full berth/seat for child or not.

There shall be no change in the rule for child fare of unreserved tickets i.e. fare for children of 5-12 years for unreserved tickets shall continue to be half of the adult fare subject to the minimum distance for charging.

Children under five years of age will continue to be carried free (without berth).

The revised child fare rule shall be applicable for travel from April, 2016 onwards. Exact date of commencement of this provision will be notified separately at a later date.

Source: PIB News

7th CPC Pension Calculation : One Rank One Pension for the pensioners cannot be justified

7th CPC Pension Calculation : OROP for the pensioners cannot be justified

One of our reader Mr.GS Joahi writes to us regarding the pension calculation recommended by the 7th Pay Commission with an illustration as follows…

The commission recommends the following pension formulations for all pensioners who retired prior 01.01.16 :- First – All the personnel who retired prior 01.01.16 shall be fixed at pay matrix being recommended by the commission on the basis of the pay band and grade pay at which they retired at the minimum of the corresponding level in the matrix. The amount shall be raised to arrive at the notional pay of the retiree by adding number of increments he/she had earned at that level while in service at the rate of three percent. Fifty percent of total amount so arrived at shall be the revised pension.

“This is totally injustice because the length of service which individual served in his previous levels are not considered. For example X&Y persons completed same length of service and retired in the year of 2000. The person of X retired from 4600 grade pay (level 7) where he earned 12 increments from his last level. The person Y promoted frequently and his last promotion got just before one year of his retirement and he retired from 5400 grade pay (at level 10) where he earned only one increment at this level. As per the VI pay commission the pension of X is fixed at Rs.8250/- and the pension of Y is fixed at Rs. 10500/-.”

On the basis of VII pay commission recommendations the pension of both person are calculated as follows :-

The pension of X Person

Formula No. 1

6th pay commission basic pension – Rs.8250/-

Initial basic pension fixed using a multiple of 2.57 – Rs.21203/-

Formula No. 2

Retired at the minimum of the corresponding level in the matrix – Rs. 44900/-Individual earned 12 increments at that level while in service – Rs.64100/-

Revised Basic pension – Rs.32050/-

The pension of Y Person

Formula No. 1

6th pay commission basic pension – Rs.10500/-

Initial basic pension fixed using a multiple of 2.57 – Rs.26985 /-

Formula No. 2

Retired at the minimum of the corresponding level in the matrix – Rs. 56100/-

Individual earned 01 increment at that level while in service – Rs 57800/-

Revised Basic pension – Rs.28900/-

On the above example OROP for the pensioners can not be justified without considering the service render at his previous levels during his service. There are a lot of cases where individual promoted at higher ranks at the time of retirement where they served only for one, two or three years of service. In the above case the person who was not promoted and served more service at lower level are more beneficial than the person who are promoted and retired from higher level.

Even the pension of the person retired from higher level can not be cross the pension of person who’s pension will be fixed by OROP, if higher level retiree initial basic pension fixed using a multiple of 2.57

7th Central Pay Commission CGEGIS : Illogical recommendation of 7th CPC

Ridiculous recommendation of 7th CPC regarding CGEGIS

As per the recommendation of seventh CPC, subscription and insurance amount have been increased manifold. Let’s discuss the same as per available data.

The present rate of monthly deduction is Rs 120, Rs 60 and Rs 30 for Gr A, B and C employees with Insurance cover of Rs 1,20,000, Rs 60,000 and Rs 30,000 respectively.

The suggestion of increased insurance cover is a very good one which nobody will oppose. But the question is whether the amount of monthly deduction prescribed is at all justified ? Let’s have a quick look on fact and figures.

Out of the monthly deduction under this scheme, 70% goes to a savings part which is refundable and 30% goes to insurance fund for providing life cover. In the proposed structure, take for example the second category where monthly deduction is Rs 2500 for insurance cover of Rs 25 Lac. in this case yearly go out to non refundable insurance fund is Rs 9000 (30% of 30,000). If a 25 year new entrant purchase a Term Policy of Rs 25 Lac for 35 year term period, his yearly premium will be only Rs 5095 (including service tax). Then why should he shell out Rs 9000 ?

It may be beneficial for older ones, like for example a 50 year old person will have to pay Rs 15,057 for Rs 25 Lac insurance cover for 10 years. Click here to view LICI website.

So the rates of monthly deductions should be fixed in more rationalized manner taking account of variable age groups and depending upon the incumbents age the premium (monthly deduction in this case) should be calculated as done in the premium calculation of any insurance company.

Hope, Govt. will seriously look into this suggestion before implementing the same.

Click here to know more about Term Insurance.

Source: http://paycommissionupdate.blogspot.in/

7th CPC Recommendations on CGEGIS

7th CPC Recommendations on CGEGIS

Central Government Employees’ Group Insurance Scheme (CGEGIS)

Introduction

Subsequent to the implementation of the III CPC recommendations, Central Government Employees’ Group Insurance Scheme (CGEGIS) was notified in 1980 and came into force w.e.f. 1 January, 1982. The scheme serves the twin objectives of (a) providing a lump-sum amount to the families in case of an employee’s death and (b) a lump-sum payment to the employee on cessation of employment, both on a wholly contributory and self-financing basis.

Present Position : CGEGIS comprises a Savings Fund and an Insurance Fund in the ratio 70:30. The present rates of deduction, insured amount and savings units are as follows:

The value, in ₹, of each unit (for Savings) is published by the Ministry of Finance every year in the form of Tables of Benefits, and the total amount is worked out using the same depending upon when the employee joined the scheme and the year/month of cessation of membership. Upon employee’s exit from the scheme, only the Savings amount, as applicable on the concerned date, is payable. In case of demise of the employee, the Savings amount applicable on date plus the Insured amount is payable.

Demands : The Commission has received numerous representations from various stakeholders stating that the Monthly Deduction as well as the Insurance Amount have remained unchanged since 1990. In the present context, they are too low and should be increased.

Analysis and Recommendations.

As a logical comparator, the Commission considered the rates under Army Group Insurance Fund (AGIF), which have become applicable w.e.f. 01.09.2013. These are as follows:

The Commission also took into view the fact that pay of Defence personnel is by and large higher than that of Civilian employees of comparable level. Hence, with suitable modifications for Civilian employees, the following rates of CGEGIS are recommended:

The Commission also took note of the fact that the Tables of Benefits published by Ministry of Finance are based on the mortality rate of 3.75 per thousand per annum up to 31.12.1987 and 3.60 per thousand per annum thereafter. In its report (brought out in January 1997), the V CPC had pointed out that the mortality rate, life expectancy and health delivery systems have improved over a period of time. They had highlighted the need “for a detailed review of the current mortality rates with a view to revising the apportionment between the Savings and Insurance Funds.” Since it was likely to take some time, they had recommended a ratio of Savings Fund to Insurance Fund of 75:25, with “appropriate machinery for a periodical review of the mortality rates and adjustment of the apportionment ratio.”

All the three factors viz., mortality rate, life expectancy and health delivery systems have further improved over the course of nearly twenty years following the V CPC recommendations. Accordingly, this Commission recommends that the ratio of Savings Fund to Insurance Fund be modified from the present 70:30 to 75:25, as an interim measure, pending a detailed review. It is also recommended that periodical reviews of mortality rates should be undertaken for suitable adjustment of the apportionment ratio. The Tables of Benefits may be modified accordingly.

Authority :http://7cpc.india.gov.in/

MACP scheme for non-gazetted administrative posts

MACP  scheme for Non-Gazetted Administrative Posts

One of our reader Mr.Amit writes to us regarding the MACP scheme for non-gazetted administrative posts…

The MACP for non-gazetted administrative posts should be changed into Promotional Basis ATLEAST ONE POINT OF TIME AT THE LEVEL FROM GROUP-B NON-GAZETTED POST TO GROUP-B GAZETTED POST instead of just increase in grade pay. Many seniormost employees who have already put more than 20, 30, 40 years, because of non-availability of vacancy, they are still in the same designation (that means in the non-gazetted post only) by getting only minimum increase in the grade pay and retire without getting promotion to the next higher position in the gazetted post even though they are eligible for promotion to the gazetted level post. In a same group of employees, some will get regular promotion very early when vacancy arises and the remaining will be in non-gazetted post only for so many years for getting the promotion and some will retire from the same post cursing their fate and the government.

Hence, it is required that those who have completed minimum residency period in the present post, or ATLEAST THOSE WHO HAVE COMPLETED 20 YEARS OF REGULAR SERVICE FROM THE DATE OF PRESENT POST (I.E., FROM THE DATE OF BECOMING ASSISTANT/SR.STENOGRAPER IN GROUP-B NON-GAZETTED POST) they should be given promotion under MACP from Group-B Non-Gazetted Level to Group-B Gazetted Level.

If 7th CPC and the government agrees for change of MACP system into promotional basis, its effective date, Commission’s / Government’s FOREMOST DUTY IS TO PROTECT THE SENIORS FIRST. THAT MEANS, THE SENIORS SHOULD BE GIVEN PROMOTION FIRST, THEN ONLY THE JUNIORS SHOULD GET PROMOTION. OTHERWISE, JUNIORS WILL GET PROMOTION TO THE NEXT HIGHER POST FROM THE DATE OF EFFECT OF MACP IN 7TH CPC AND THE SENIORS WILL BE IN THE SAME OLD DESIGNATION. Already the seniors are not benefitted in 6th cpc, atleast they should be benefitted by getting promotion BEFORE THE JUNIORS GET.

THIS HAS TO BE TAKEN CARE BY ALL THE FEDERATIONS, 7TH CPC AND THE GOVERNMENT.