Minimum pension fixed for retired Central Government employees

Minimum pension fixed for retired Central Government employees

Minimum Pensions

The minimum pension fixed for retired Central Government employees is Rs. 3,500/- per month with effect from 01.01.2006. For pensioners, including those retired from public sector corporations and other establishments, to whom the Employees’ Pension Scheme (EPS), 1995 framed under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 applies, provision of a minimum pension of Rs. 1,000/- per month has made with effect from 01.09.2014.

The Sixth Central Pay Commission had recommended pension of Rs. 3,330/- per month in respect of employees retired from the Central Government. The minimum pension of Rs. 1,000/- per month under the EPS, 1995 implemented by the Central Government was one of the recommendations of the Expert Committee constituted by the Government. Apart from this, the Committee on Petitions of the Rajya Sabha under the chairmanship of Shri Bhagat Singh Koshiyari in its 147th Report had recommended to increase Government share of contribution under EPS, 1995 from 1.16 per cent to 8.33 per cent to support the minimum pension level of Rs. 3000/- per month. However, it was not found feasible for implementation.

No complaints regarding anomalies in minimum pension in respect of Central Government employees have been received by the Government.

However, representations, grievances and complaints have been received from various quarters that the monthly pension to pensioners under EPS, 1995 have not increased to Rs. 1,000/- per month even after the notification in respect of pensioners who had taken short service pension, commutations or return of capital. Some grievances also relate to the fact that pension has not increased for those drawing more than Rs. 1,000/- per month.

Consequent upon implementation of the minimum pension to pensioners under EPS, 1995 vide notification number GSR 593(E) dated 19.08.2014, the pension of all member/widow(er)/disabled/ nominee/dependent parent pensioners whose original pension was less than Rs. 1,000/- per month had been fixed at the minimum of Rs. 1,000/- per month. In cases where members had preferred option for Commutation, Return of Capital and Short Service Pension and have already availed these benefits as per choice exercised by them at the time of making pension claim, the deductions on account of these options would continue to apply on the minimum pension of Rs. 1,000/- per month that has now been fixed. In such cases, the pension amount would be less than Rs. 1,000/- per month even after implementation of the said notification.

This information was given by Shri Bandaru Dattatreya, Minister of State (IC) for Ministry Labour and Employment, in reply to a question in Lok Sabha today.

Source: PIB News

Analysis and Recommendations of Reduction in the time period for Restoration of Basic Pension

Reduction in the time period for Restoration of Basic Pension

The Commission has received a number of representations requesting reduction of restoration period of commuted portion of pension from the existing 15 years.

Analysis and Recommendations : The Commission notes that prior to V CPC the commutation allowed was one-third. However, there was no restoration. The Supreme Court, vide their judgement dated 09.12.1986, allowed restoration of pension after 15 years. The Supreme Court in its judgement specifically stated that though the amount is recovered in 12 years, yet since there is a risk factor and some of the states are restoring pension after 15 years, the period of restoration is fixed at 15 years. The V CPC in its recommendation increased the percentage of commutation to 40 percent and recommended restoration period at 12 years. But the reduction of restoration period was not accepted by the government. The VI CPC did not recommend any change in the maximum percentage of commutation allowed or in the period of restoration.

This Commission also does not recommend any change either in the maximum percentage of commutation or in the period of restoration.

Authority: 7th CPC Report

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