Finance Department

(Pensions and Other Retirement Benefits)

POLICY NOTE FOR 2002-2003 

DEMAND No. 48 

1. 1. The first major component of the expenditure under this demand relates to pension and pensionary benefits of Government employees and teaching and non-teaching staff in Aided Educational institutions.  This demand also covers the expenditure on pension and other benefits granted to freedom fighters and Ex-INA personnel.  There are about 4,59,874 pensioners and family pensioners in this state as on 31.12.2001. The details of pensioners and family pensioners in the State are given below: 

2. This Demand comprises the following  major heads:                                  

 
PENSION AND OTHER BENEFITS TO GOVERNMENT EMPLOYEES AND TEACHING AND NON-TEACHING STAFF OF AIDED EDUCATIONAL INSTITUTIONS.

3. The State Government is following the pattern of retirement benefits adopted by the Government of India for its employees.  Several of the retirement benefits have been liberalised by the State Government on the lines of Government of India such as the procedure for calculation of pension, service gratuity and death gratuity and raising the upper ceiling for gratuity. 

4. PENSION : 

A minimum qualifying service of 10 years is necessary for eligibility for pension.  Pension is calculated at 50 percent of the pay last drawn at the time of retirement or 50 per cent of average emoluments, drawn during the last 10 months prior to retirement whichever is higher.  Full pension is admissible for a maximum qualifying service of 30 years and  proportionate pension is paid  for a qualifying service of less than 30 years.   The Government has issued orders revising pension/family pension with effect from 1.1.96 as granted to Central Government pensioners/family pensioners.  Minimum pension has been enhanced from Rs.375/- to Rs.1275/- per month with effect from 1.1.1996.  

5. GRATUITIES:

 (i) Service Gratuity :    

 Service gratuity is admissible for those who have put in less than 10 years of qualifying service.  It is calculated at the uniform rate of half a month’s emoluments for every completed six monthly period  of service.  This is a one time lumpsum payment for the service rendered in addition to the retirement gratuity admissible.    

(ii) Death Gratuity : 

In the event of death in harness, death gratuity is admissible at the following rates:- 

 iii) Retirement Gratuity : 

One who has completed five years of qualifying service and above is granted retirement gratuity on his retirement at the rate of 1/4th of emoluments for each completed six monthly period of qualifying service subject to a maximum of 16 1/2 times of monthly emoluments.  The Government has issued orders enhancing the maximum of retirement gratuity from Rs.2.50 lakhs to 3.50 lakhs with effect from 1.1.1996.  The Government has also issued orders that the calculation of gratutity will be based on pay and dearness allowance last drawn in respect of the employees retiring on or after 1.4.1998.  

6. FAMILY PENSION : 

The family of a Government servant is eligible for family pension in the event of his death either in service or after retirement.  In the case of death while in service, one year continuous service in a pensionable post at any time during his service is required to become eligible for family pension.  Family pension is also allowed to the family of Government Servants who die in harness before completion of one year continuous service provided that the deceased Government servant concerned immediately prior to his appointment to the service or post was examined by a medical authority and declared fit for Government service.  In the case of death after retirement, one should be a pensioner at the time of death to become eligible for family pension.  However, minimum family pension is allowed in cases of death after retirement to those who had put in less than 10 years of service and otherwise not eligible for pension.  

The Government has issued orders enhancing the minimum family pension from Rs.375/- to Rs.1275/- per month. The maximum family pension will be 30% of the maximum of the highest pay scale. 

Family pension is payable to the widow/ widower till her/his remarriage or death whichever is earlier.  After her/his death, it is payable to the children upto the age of 25 years. However, if the son/unmarried daughter is suffering  from  any  disorder or disability of mind or physically crippled or disabled so as to render him/her unable to earn a living even after  attaining the age of 25 years, the family pension shall be payable to such son/daughter for his/her life time.  

7. EX-GRATIA PAYMENT : 

Government has issued orders enhancing  ex-gratia payment from  Rs.150 per month to Rs.605/- per month with Dearness Allowance of Rs.31/-with effect from 1st November 1997 to the families of deceased Contributory Provident Fund / Non-Pensionable establishment beneficiaries of State Government and the employees of former District Board who had retired / died in harness prior to 1st January 1986 and who are not eligible for family pension.  They are also eligible for the increase in Dearness Allowance sanctioned by the Government from Ist January 1998 onwards.  

8. COMMUTATION OF PENSION : 

Pensioners are eligible to commute a portion of pension into a lumpsum payment.  This commutation of pension is authorised by the Accountant-General without medical examination if they apply for the same within one year from the date of issue of Pension Payment Order.  This concession has been extended in the case of voluntary retirement also.  The Government has also allowed restoration of the commuted portion of pension after 15 years from the date of retirement in cases where commutation of pension is simultaneous with retirement or 15 years from the date of commutation where commutation of pension is done in the second or subsequent months of retirement.  The Government has issued orders permitting commutation upto 40% of pension instead of 1/3rd of pension for those retiring on or after 1st April 1998. 

9. OTHER RETIREMENT BENEFITS : 

1. i)   Encashment of earned leave at credit at the time of retirement upto a maximum of 240 days is allowed. 
2. ii)   Encashment of 50 percent of the leave on private affairs standing to their credit at the time of retirement upto a maximum of 90 days is also allowed. 
3. iii)   Full leave salary is allowed for the entire portion of earned leave and unearned leave on private affairs. 
4. iv)   Transfer Travelling Allowance is allowed  for going to native place or to the place wherever  retired employee wishes to settle down after retirement.