Sixth CPC Report (xii):Retirement benefits for civilian employees

The subject matter concerning more than 38 lakh pensioners ( Defence 19.4 Lakhs, Railways 10.18 Lakhs & Civilians 5.83 Lakhs) with financial liability at current rates being Rs. 30000 Crs. has been dealt with in Chapter 5 of the Sixth Central Pay Commission (CPC) Report. Contrary to expectations the Pay Commission has not suggested any change in the retirement age which would remain at 60 years.The recommendations also do not affect the employees having joined after 1/1/2004 since they are covered under the New Pension Scheme. The said scheme is also flexible in the sense that an employee can assure for himself higher retirement benefits by making contribution at higher rates and hence any additional benefits to the members of the new scheme were not found due.

Regarding the quantum of benefit ( Para 5.1.32) the recommendation is for retention of the existing formula of calculating pension as 50% of the average emoluments. However the Commission has felt that the existing system of payment of full pension only after completion of 33 years of service needs to be changed , since under this system an employee wishing to switch over to alternative employment continues to hang on to Government job merely for the purpose of ensuring full pension on retirement . It has suggested that an employee having rendered qualifying service of 20 years should be entitled to full pension . The pension should be fixed @ 50% of the average pay for last ten months or the last pay drawn whichever is higher.

For the existing pensioners the CPC has proposed additional pension being added  @ 20% of the basic pension on attainment of  age of 80, 85,90, 95 and 100 years.

For payment of commutation amount the Commission has noted that various factors suggest that the procedure of restoration of commuted amount after 15 years appears to be more than fair. However the Commission has recommended the a new table (Annex.5.1.2) for calculation of commutation values.

Commutation Table

                                                            (New Commutation Table)

It has also suggested that the business of commutation be passed on to PSU Banks/ Institutions as a routine financial activity. Commission has also suggested periodical review of commutation formula based on market interest rates and mortality rates.

For payment of gratuity the recommendation is for raising of pecuniary limit of Rs. 3.5 Lakhs to Rs. 10 Lakhs.

For leave encashment the recommendation is for allowing encashment of half pay leave (HPL) @ 50% of admissible leave salary also without any consequent reduction in pensionary benefits. However overall combined ceiling of 300 days for encashment of Earned Leave  & HPL shall continue.

For family pension formula any changes have not been suggested except for the recommendation that the pension at enhanced rate would be paid for 10 yrs. (instead of 7 Yrs. for others) in respect of employees dying in harness. The admissibility ceiling of 25 years of age for unmarried daughters has already been removed. Further for medical benefit in respect of family pensioners the dependent children of widowed/ unmarried daughter shall be considered as part of family. The widowed daughter would also enjoy primacy of first category for benefit of family pension. Another major change suggested is that a childless widow shall continue to receive family pension even after her remarriage till her income from all sources exceeds the minimum pension payable in Central Govt.. This progressive gesture has been made to remove the factors which act as impediment in remarriage of such widows.

For cases of employees having accquired (100%) disability a provision has been made for payment of salary for constant attendant on pattern of Army Pensioners.

Amount of Ex gratia payable in case of accident in course of performance of duty has been doubled to Rs. 10 Lakhs and to Rs.15 Lakhs when the casualty is in an International war or due to natural disaster/acts of terrorism in a hard posting area.

The fitment benefit offered to existing pensioners would be 40% of the pension after excluding the merged portion of 50% dearness relief/dearness allowance . In the Table contained in Annexure 5.1.1 details of fitment benefit are available.

Later:The  Finance Ministry have notified the recommendations for Pensioners as accepted by the Govt. along-with the details of conversion table. Click here for accessing the same,

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