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PENSION RULESTYPES OF PENSIONS

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PENSION RULES.

Various kinds of Pension. Superannuation pension On retirement after superannuation

Retiring pension On voluntary retirement or premature retirement before superannuation

Pension on absorption in PSU On absorption of the employee in PSU Duly permitted by govt.

Pension on absorption in PSU On conversion of govt dept in to PSU and On absorption of the employee in the PSU

Invalid pension On retirement after being declared by the competent authority to be permanently incapacitated for further service

Compensation pension On selection for discharge owing to the abolition of his permanent post

Compulsory retirement pension. On compulsory retirement as a measure of punishment.

Compassionate appointment. On dismissal or removal sanctioned by the competent authority in a case deserving of special consideration.

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VARIUOS COMPONENTS TO DECIDE PENSION

• Following are the various components to decide the quantum of pension.

1.Qualifying service.2. Emoluments.

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QUALIFYING SERVICE.

1. Qualifying service of a govt servant commences from the date he takes charge of the post to which he is first appointed in a permanent capacity.

2. Temporary service immediately followed by regular appointment without interruption will also qualify.

3. Following shall constitute qualifying servicea)Duty and periods treated as duty.b) All kinds of leave with leave salary.c) Deputation and foreign service.

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QUALIFYING SERVICE

• d) Exol on MC.• e) Pre appointment training immediately followed by

appointment as Group C and Group D.• f) Service on probation followed by confirmation.• g) Service as SAS apprentice.• h) Suspension followed by reinstatement.• i)Suspension followed by major penalty and absence

from duty including suspension if any ,ordered by the competent authority that it shall count as service.

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QUALIFYING SERVICE

Following shall not constitute qualifying service1. Service rendered before attaching the age of 18

years.2. Service as apprentice except SAS apprentice.3. Unauthorised absence treated as Dies non.4. Over stayal of leave /Joining time not regularized as leave with salary 5. EOL without MC 6. Suspension followed by major penalty and the

suspension period ordered not to be counted for pension.

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QUALIFYING SERVICE

1. Qualfying service so arrived will be expressed in completed six monthly periods.

2. Fractions equal to three months and above shall be treated as one six monthly period(SMP)

3. Fractions less than three months will be ignored.

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EMOLUMENTS.

1. Emoluments for pension include only Basic pay in Pay band and Grade Pay and non-practicing allowance.

2. Dearness allowance or any other allowance will not be taken in to account.

3. For arriving at the basic pension, Emolument is calculated based on the Last pay drawn (BP+GP).

4. ’Average emoluments‘ mean the average of emoluments that were drawn during the last ten months.

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EMOLUMENTS

5. If an employee immediately before retirement or death in service had been on leave with salary, the emoluments which he would have drawn had he not been on leave will be taken as emoluments. 6. If under suspension and subsequently reinstated in to

service without forfeiture of service the emoluments which he would have drawn had he not under suspension will be taken as emoluments.

7. If on EXOL emoluments drawn immediately before proceeding on such leave will be taken as emoluments.8. While calculating average emoluments the period of extraordinary leave, dies non, overstayal of leave or joining time and suspension not counting for pension falling within the last ten months will be ignored and a corresponding added before ten months.2.4.4

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EMOLUMENTS

9 .If on EXOL emoluments drawn immediately before proceeding on such leave will be taken as emoluments.10 .While calculating average emoluments the period of extraordinary leave, dies non, overstayal of leave or joining time and suspension not counting for pension falling within the last ten months will be ignored and a corresponding added before ten months.

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CALCULATION OF PENSION

1. After arriving at the net qualifying service and Emoluments pension is calculated.

2. The amount pension will be 50% of last pay drawn on the date of retirement or 50% of average emoluments which ever is more beneficial.

3. The pension arrived so shall not be less than Rs.3500/-.

4. The amount of pension should be rounded off to the next higher rupee.

5. Pension is admissible to an employee with minimum qualifying service of not less tahn10 years .

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RETIREMENT GRATUTITY

1. Retirement gratuity is admissible to all employees who retire after completion of 5 years of servcie.

2. RG is calculated at the rate of 1/4 th of emoluments for each completed six months service.

3. For this purpose emolument means Basic pay +GP+DA.

4. RG is subject to a maximum of 16.5 times of the emoluments or 10,00,000/- whichever is less.

5. The amount of gratuity is rounded off to the next higher rupee.

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DEATH GRATUTITY

• On the death of a government servant in service death gratuity is payable as follows.

LENGTH OFSERVICE DEATH GRATUTITY PAYABLE

Less than one year. 2 times of emoluments.

One year or more but less than 5 years.

6 times of emoluments.

5 years or more but less than 20 years.

12 times of emoluments.

20 years or more Half of emoluments for every completed six monthly period of qualifying service subject to a maximum of 33 times of emoluments or Rs.10,00,000/-

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COMMUTATION OF PENSION

1. Every pensioner is eligible to commute a portion of his pension for a lumpsum payment

2. An employee or a pensioner against whom any deptl/ vig/ judicial case is pending ,is not eligible for commutation .

3. A maximum of 40% monthly pension can be commuted.4. A person in receipt of Superannuation pension retiring

pension or compensation pension can commute up to a maximum of 40% of pension without medical examination if he applies for the same within a period of one year from DOR.

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COMMUTATION OF PENSION

5.If an official is retired on invalidation/retired compulsorily as a measure of penalty or in receipt of compassionate allowance then he can commute pension only after medical examination.6.All other pensioners if they apply for commutation after one year from the DOR then they will have to undergo medical check up.7.The commutation amount will be rounded off to the next higher rupee.

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CALCULATION OF COMMUTATION

• Commutation amount payable is calculated as follows.• Commutation factor X 12 X amount of pension offered for

commutation.• Example; Official retired on 60 years of age with LPD

(16000+4000) Rs.20,000/-• Basic pension Rs.10,000.• Mxm commutation 40% on Rs.10,000=4,000/-• Comn factor for 61 years of age =8.194• Comn amt = 8.194 X 12 X 4000 =3,93,312/-• Commutation payable is Rs. 3,93,312/-

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REDUCTION IN PENSION

1. The reduction in the amount of pension on commutation will become operative from the date of receipt of commuted value by the pensioner or at the end of three months after issue of authority for payment.

2. If an official retires on superannuation and applies for commutation before the date of retirement the reduction will take effect from the day following the day of retirement and reduction becomes effective from same date.

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RESTORATION OF REDUCTION

• The reduced portion of pension on account of Commutation will be restored on the expiry of 15 years from the date of retirement if the commutation is received in the first month of retirement.

• In other cases , the commutation portion of pension will be restored after 15 years from the date of receipt of commutation amount.

• If the commuted value of pension is paid in two instalments due to revision of pension the date of restoration will also be the same as for original commutation.

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FAMILY PENSION

1. 1.Family pension is payable to the family of an employee/pensioner on his death in service/ after retirement.

2. Family meansi) Widow or widower up to the date of death or remarriage whichever is earlier.

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FAMILY PENSION

ii) Son/Daughter(including widowed daughter) up to the date of his/her marriage/remarriage or till the date he/she starts earning or till the age of 25 years whichever is the earliestiii) Parents who were wholly dependent on the govt servant when he/she was alive provided the deceased employee had left behind neither a widow nor a child.iv) Dependant son/daughter with disabilities as also dependant brother/sisters with disabilities

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CALCULATION OF FAMILY PENSION

1. The family pension is calculated on the LPD on the date of death or retirement.LPD includes Basic pay +GP+NPA.

2. Normal family pension is admissible at the rate of 30% of LPD subject to a minimum of Rs.3500/-pm.

3. The family pension is rounded off to the next higher rupee.

4. Enhanced family pension is payable as follows.

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ENHANCED FAMILY PENSION

In the case of death in service ;1.Payable for a period of 10 years from the date of death of a

government servant without any upper age limit. 2.The enhanced family pension is payable at the rate of 50%

of the LPD.In the case of death after retirement; 1.Payable for a period of 7 years from the date of death of a

pensioner or up to the date on whish he would have attained the age of 67 years had he survived which ever is less

2. 2.The enhanced family pension is payable at the rate of 50% of the LPD or the amount of pension authorized which ever is less.2.4.4

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DEARNESS RELEF ON PENSION / FAMILY PENSION

1. Dearness relief is admissible to pension and family pension.

2. While calculating DR on pension the same will be calculated on the original pension without deducting commuted portion of pension.

3. Dearness relief is sanctioned at the same rate as applicable to DA on pay and allowances.

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PENSION PAPER

1. The age prescribed for retirement on superannuation for government servants is 60 years of age.

2. Officials appointed on or before 31.12.2003 alone are eligible for pension as provided under CCS(Pension) rules 1972.

3. The Head of office is to collect pension papers in advance so as to settle pension entitlements in time.

4. Before processing pension papers the Head of office should ensure proper updating of service books of such officials who are due to retire .

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PENSION PAPER

• a)An entry to the effect that the official was medically examined on first appointment and the Medical certificate is available in the SBK.

• b)The date of birth and date of confirmation are available in the service book.

• c)The annual service verification /CGEGIS premium recovery entries are available in the service book without break.

• d)Entries regarding treatment of military service/exol/break in service etc., are properly recorded in the service book.

• e)Entries relating to nominations in respect of DCRG/GPF/CGEGIS are available

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PENSION PAPER

• f)Latest list of family members in form III are available.• g)Qualifying Service verification on completion of 25 years of

service or having five years of service to go on retirement is completed and necessary endorsement is made by PAO.

4.The Head of office shall prepare on 01.01 and 01.07 a list containing names of officials who are due to retire within 24 to 30 months of that date

5.Two years in advance of the date of retirement of the official the Head of office shall start preparing pension papers.

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PENSION PAPER

6.Following are the standard forms for collection from the official. Sl.no Form

no Details of the form

1. 1&2 Nomination for DCRG2. 3. Details of family3. 5. Particulars to be obtained by the Head of office from the

retiring Government servant eight months before the date of his retirement

4. 7 Form for assessing Pension/Family pension and gratuity

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PENSION PAPER

7.Before ten months to the date of retirement the Head of Office shall furnish to the retiring government servant a certificate regarding length of qualifying service proposed to be admitted for pension and gratuity as also emoluments and average emoluments proposed to be reckoned for pension/ gratuity.

8.A form-5 shall be forwarded to the retiring government servant advising the government servant to submit it duly filled so as to reach HOO not later than eight months prior to retirement.

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PENSION PAPER

• 9.The HOO ,not later than six months of the date of retirement of the government servant shall forward following forms to the PAO.

a)Form 5 b)Form 7 c)Form 8(Forwarding letter to PAO) d)Pension calculation sheet in triplicate• 10.The service book of the official complete in all respect

will also be forwarded to PAO.• 11.The HOO also ascertain departmental dues if any to

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PENSION PAPER

12.On receipt of C&R form from the PAO the HOO will arrange for furnishing reply to the queries raised in the C&R form immediately.

13.Then the PAO will issue PPO. 14.On receipt of PPO the HOO will issue sanction for the

disbursement of pension benefits.

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EXERCISE 1

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