DA ORDERS FOR GDS

PAYMENT OF DEARNESS ALLOWANCE TO GRAMIN DAK SEVAKS (GDS) AT THE REVISED RATES W.E.F.  01.01.2013 ONWARDS –REG.

DG (Posts) No 14-01/2011-PAP                                              Dated 30^th April, 2013

      Consequent upon grant of another installment of Dearness Allowance with effect from 1^st January 2013 to the Central Government employees, vide Government of India, Ministry of Finance, Department of Expenditure, O.M. No 1(2)/2013-E-II(B) dated 25^th April, 2013 , duly endorsed vide this Department’s letter No. 8-1/2012-PAP dated 25.04.2013, the Gramin Dak Sevaks (GDS) have also become entitled to the payment of Dearness Allowance on basic TRCA at the revised rates with effect from 01.01.2013.  It has, therefore, been decided that the Dearness Allowance payable to Gramin Dak Sevaks shall be enhance from the existing rate of 72% to 80% on the basic Time Related Continuity Allowance,  with effect from 1^st January, 2013.

2. The Additional installment of Dearness Allowance payable under this order, shall be paid in cash for all Gramin Dak Sevaks.

 3. The expenditure on this account will be debited to the sub Head 'Salaries' under the relevant head and should be met from the sanctioned grant.

4. This issues with the concurrence of Integrated Finance Wing vide their Diary No 17/FA/13/CS dated 30.04.2013.

Grant of Dearness Relief to Central Government pensioners/family pensioners - Revised rate effective from 1.1.2013

Click here to view Department of Pension & Pensioners' Welfare OM F. No. 42/13/2012-P&PW(G) dated 02.05.2013.

Stepping up of pay of the senior with reference to the revised pay of juniors applicability of Notes 7 & 10 below Rule 7 (1) of CCS (RP) Rules, 2008.

New Pension Scheme
(Defined Contributory Pension Scheme)

PRELIMINARY STUDY REPORT

Presented by

K.V.RAMESH, SSE/ICF

JGS (Finance & Administration) /IRTSA

Pension - Greatly Valued Pension is valuable in the sense that it is secure. Supreme Court held that pension is a valuable right vested in a Govt. servant. Refusal, reduction, forfeiture of pension not allowed unless on extreme conditions. Pension is secured against attachment & seizure.

Defined Benefits Pension & GPF  (prior to 1.1.2004) Pension   Commutation of Pension   Retirement Gratuity   Death Gratuity   Service Gratuity   Leave Encashment   Family pension   Group Insurance

Types of Pension (1) Superannuation calculated as 50% of average emoluments of last 10 months salary drawn subject to the minimum of Rs.3500 and maximum of Rs.45000. (2) Family Pension At the rate of 30% of basic pay subject to the minimum of Rs.3500 and maximum of Rs.27000. (3) Voluntary Retirement (VR ) Maximum of 5 years weightage in the Qualifying Service

COMMUTATION OF PENSION Can commute a lumpsum payment not exceeding 40%. Reduced pension in proportion to the % of commutation and age factor. Commuted portion of pension shall be restored after the completion of 15 years. Lumpsum amount received on commutation of pension is not liable for Income tax. Dearness relief calculated to the original pension not on the reducedpension.

Gratuity Retirement Gratuity: Admissible (along with pension) on retirement after completion of 5 years of qualifying service.  Calculated @ 1/4th of a month’s Basic Pay + DA for each completed six monthly period of qualifying service. Maximum retirement gratuity payable is 16. times of emolument limited to Rs. 10 lakhs.  Death Gratuity: Payable to the nominee in the event of employees death.  Service Gratuity: entitled for service gratuity (and not pension) if total qualifying service is less than 10 years.

New Pension Scheme(Defined Contributory Pension Scheme) Salient Features Operational with effect from 1.1.2004. Implemented by Central Government and 22 states. Existing provision of Defined Benefit Pension & GPF would not be available to new Govt. servants joining service on or after 1.1.2004. Will have tiers – Tier-I & tier-II. CONTRIBUTION TO TIER-I  10% of BP+DA contribution by the Govt. servant every month. Equal matching contribution by the Government. Kept in the non-withdrawable Pension Tier-I account. Tier-II voluntary contribution will be kept in a separate withdrawable account. The scheme is implemented by Central Record keeping Agency & Several Pension Fund mangers. An independent Pension Fund Regulatory and Development Authority (PFRDA) will regulate the pension market.  Permanent Retirement Account Number (PRAN) allotted after 1.4.2008.  Govt. servant can exit at or after 60 years of age.  60% of pension wealth can be withdrawn lumpsum.  40% of pension wealth to be invested in annuity - mandatory – to provide pension for life time for self and dependent. To leave the scheme before 60 years of age 80% of pension wealth mandatory for investment.  Benefit of Invalid pension, Disability pension, Family pension, Extraordinary Family pension are extended.  Retirement Gratuity for discharge from duty due to Disease / Injury or invalidation also extended.

  

Six Pension Fund Managers ICICI Prudential Pension Funds Management Company Limited IDFC Pension Fund Management Company Limited Kotak Mahindra Pension Fund Limited Reliance Capital Pension Fund Limited SBI Pension Funds Private Limited UTI Retirement Solutions Limited

  

Comparison of Earnings of Old Pension Scheme and NPS CIRCUMSTANCES ASSUMED Date of Appointment - 1.1.2006 Entry Grade - GP - 4200, PB-2, 9300 – 34800 VI CPC period - 1.1.2006 to 31.12.2015 VII CPC period - 1.1.2016 to 31.12.2025 (with the multiplication factor of 2.06 + 40% fixation) VIII CPC period - 1.1.2026 to 31.12.2035 (with the multiplication factor of 2.06 + 40% fixation) Dearness Allowance - Jan 2006 to Dec 2011 actual, From Jan 2012 to Dec 2015 assumed increase @ 6% every half year for the periods 1.1.2016 to 31.12.2025 & 1.1.2026 to 31.12.2035. Promotion / MACPS - First promotion/ MACPS during Jan-2016 and second promotion / MACPS during Jan-2026

Inflation proof for new Pension not available (Rs. in thousands)





Inflation proof for new Pension not available (Rs. in thousands)

THE

IMPLICATIONS

ARE 

QUITE DEEP

Right for dignified life stripped

• In a single swoop the idea of pensions being rights of workers, has been thrown into the neo-liberal dustbin.
• Fundamental issue of stripping of employees’ right to a life of dignity
• The return under NPS is market driven.
• There is no guaranteed/defined amount of return.
• The returns generated through investments are accumulated and is not distributed as dividend or bonus

Why Armed Forces kept away

• If the expected return under NPS is much higher than the return under existing old Pension Scheme, why does not the government allow the members of the Armed Forces to exercise this option? Armed force are the most valued functionaries of the nation. That the members of the Armed Forces are being kept under old pension scheme does indicate that there is something shady in the argument that NPS would earn better; at least the government itself is not convinced that NPS would give better benefits to its employees. One can never be sure that the returns from equities would always be better than the guaranteed returns.

Govt arguments not true

• While introducing the NPS, the Government had argued in the same way as one would find in the IMF Report (2001).
• Briefly speaking, the argument is that DBS is unsustainable because thepension expenditure is increasing at a very high rate.
• Thus, over 1993-94 to 2004-05, the pension expenditure of the GOI has increased by 21 per cent; for the state governments, the rate of increase is still higher (27 per cent over the same period).

Is DBS unsustainable in India

• What the Government did not mention is that the government’s pension expenses as a percentage of GDP is quite negligible in India (less than 0.1 per cent).
• In South Korea or in Hongkong it is about 2 per cent.
• In Italy, France and Germany where the coverage under DBS pension is wide, the pension expenses as percentage of GDP is much higher in these countries.
• In Italy it is 14 per cent; in France and Germany the ratio is 12 per cent. In Japan 9 per cent of the GDP is spent on DBS pension.
• One wonders how it becomes unsustainable in India where the expenses on DBS pension is so low.

NPS SHOULD GO

• The argument that DBS would render all governments ‘bankrupt’ thus appears to be untenable.
• Why should the small pensioners who usually do not have savings to tideover the crisis should be driven to uncertain situation?
• Global capital does not have any moral obligation to honour the right of the citizen to live with dignity even in the retired life.

Comparison between New Pension Scheme & Old Pension Scheme

New Pension Scheme
(Defined Contributory Pension Scheme)

PRELIMINARY STUDY REPORT

Presented by

K.V.RAMESH, SSE/ICF

JGS (Finance & Administration) /IRTSA

Pension - Greatly Valued Pension is valuable in the sense that it is secure. Supreme Court held that pension is a valuable right vested in a Govt. servant. Refusal, reduction, forfeiture of pension not allowed unless on extreme conditions. Pension is secured against attachment & seizure.

Defined Benefits Pension & GPF  (prior to 1.1.2004) Pension   Commutation of Pension   Retirement Gratuity   Death Gratuity   Service Gratuity   Leave Encashment   Family pension   Group Insurance

Types of Pension (1) Superannuation calculated as 50% of average emoluments of last 10 months salary drawn subject to the minimum of Rs.3500 and maximum of Rs.45000. (2) Family Pension At the rate of 30% of basic pay subject to the minimum of Rs.3500 and maximum of Rs.27000. (3) Voluntary Retirement (VR ) Maximum of 5 years weightage in the Qualifying Service

COMMUTATION OF PENSION Can commute a lumpsum payment not exceeding 40%. Reduced pension in proportion to the % of commutation and age factor. Commuted portion of pension shall be restored after the completion of 15 years. Lumpsum amount received on commutation of pension is not liable for Income tax. Dearness relief calculated to the original pension not on the reducedpension.

Gratuity Retirement Gratuity: Admissible (along with pension) on retirement after completion of 5 years of qualifying service.  Calculated @ 1/4th of a month’s Basic Pay + DA for each completed six monthly period of qualifying service. Maximum retirement gratuity payable is 16. times of emolument limited to Rs. 10 lakhs.  Death Gratuity: Payable to the nominee in the event of employees death.  Service Gratuity: entitled for service gratuity (and not pension) if total qualifying service is less than 10 years.

New Pension Scheme(Defined Contributory Pension Scheme) Salient Features Operational with effect from 1.1.2004. Implemented by Central Government and 22 states. Existing provision of Defined Benefit Pension & GPF would not be available to new Govt. servants joining service on or after 1.1.2004. Will have tiers – Tier-I & tier-II. CONTRIBUTION TO TIER-I  10% of BP+DA contribution by the Govt. servant every month. Equal matching contribution by the Government. Kept in the non-withdrawable Pension Tier-I account. Tier-II voluntary contribution will be kept in a separate withdrawable account. The scheme is implemented by Central Record keeping Agency & Several Pension Fund mangers. An independent Pension Fund Regulatory and Development Authority (PFRDA) will regulate the pension market.  Permanent Retirement Account Number (PRAN) allotted after 1.4.2008.  Govt. servant can exit at or after 60 years of age.  60% of pension wealth can be withdrawn lumpsum.  40% of pension wealth to be invested in annuity - mandatory – to provide pension for life time for self and dependent. To leave the scheme before 60 years of age 80% of pension wealth mandatory for investment.  Benefit of Invalid pension, Disability pension, Family pension, Extraordinary Family pension are extended.  Retirement Gratuity for discharge from duty due to Disease / Injury or invalidation also extended.

  

Six Pension Fund Managers ICICI Prudential Pension Funds Management Company Limited IDFC Pension Fund Management Company Limited Kotak Mahindra Pension Fund Limited Reliance Capital Pension Fund Limited SBI Pension Funds Private Limited UTI Retirement Solutions Limited

  

Comparison of Earnings of Old Pension Scheme and NPS CIRCUMSTANCES ASSUMED Date of Appointment - 1.1.2006 Entry Grade - GP - 4200, PB-2, 9300 – 34800 VI CPC period - 1.1.2006 to 31.12.2015 VII CPC period - 1.1.2016 to 31.12.2025 (with the multiplication factor of 2.06 + 40% fixation) VIII CPC period - 1.1.2026 to 31.12.2035 (with the multiplication factor of 2.06 + 40% fixation) Dearness Allowance - Jan 2006 to Dec 2011 actual, From Jan 2012 to Dec 2015 assumed increase @ 6% every half year for the periods 1.1.2016 to 31.12.2025 & 1.1.2026 to 31.12.2035. Promotion / MACPS - First promotion/ MACPS during Jan-2016 and second promotion / MACPS during Jan-2026

Inflation proof for new Pension not available (Rs. in thousands)





Inflation proof for new Pension not available (Rs. in thousands)

THE

IMPLICATIONS

ARE 

QUITE DEEP

Right for dignified life stripped

• In a single swoop the idea of pensions being rights of workers, has been thrown into the neo-liberal dustbin.
• Fundamental issue of stripping of employees’ right to a life of dignity
• The return under NPS is market driven.
• There is no guaranteed/defined amount of return.
• The returns generated through investments are accumulated and is not distributed as dividend or bonus

Why Armed Forces kept away

• If the expected return under NPS is much higher than the return under existing old Pension Scheme, why does not the government allow the members of the Armed Forces to exercise this option? Armed force are the most valued functionaries of the nation. That the members of the Armed Forces are being kept under old pension scheme does indicate that there is something shady in the argument that NPS would earn better; at least the government itself is not convinced that NPS would give better benefits to its employees. One can never be sure that the returns from equities would always be better than the guaranteed returns.

Govt arguments not true

• While introducing the NPS, the Government had argued in the same way as one would find in the IMF Report (2001).
• Briefly speaking, the argument is that DBS is unsustainable because thepension expenditure is increasing at a very high rate.
• Thus, over 1993-94 to 2004-05, the pension expenditure of the GOI has increased by 21 per cent; for the state governments, the rate of increase is still higher (27 per cent over the same period).

Is DBS unsustainable in India

• What the Government did not mention is that the government’s pension expenses as a percentage of GDP is quite negligible in India (less than 0.1 per cent).
• In South Korea or in Hongkong it is about 2 per cent.
• In Italy, France and Germany where the coverage under DBS pension is wide, the pension expenses as percentage of GDP is much higher in these countries.
• In Italy it is 14 per cent; in France and Germany the ratio is 12 per cent. In Japan 9 per cent of the GDP is spent on DBS pension.
• One wonders how it becomes unsustainable in India where the expenses on DBS pension is so low.

NPS SHOULD GO

• The argument that DBS would render all governments ‘bankrupt’ thus appears to be untenable.
• Why should the small pensioners who usually do not have savings to tideover the crisis should be driven to uncertain situation?
• Global capital does not have any moral obligation to honour the right of the citizen to live with dignity even in the retired life.

Gratuity Pay under New Pension System

Ministry of Finance 03-May, 2013

Gratuity Pay under New Pension System

Death-cum-Retirement Gratuity is paid to Central Government employees under New PensionSystem (NPS) as it is paid under the old pension scheme. The monthly annuity under the New Pension System (NPS) is only a replacement of pension on retirement and family pension of death after retirement. The benefits of Death cum Retirement Gratuity (DCRG) and pension/family pension have been provisionally allowed, vide the Office Memorandum of Department of Pension and Pensioners’ Welfare No. 38/41/06-P & PW(A) dated 5.5.2009 in respect of Central Government servants covered under NPS in cases where a Government Servant is retired on invalidation/disability and in the case of death of a Government servant in service on the same rates as are applicable under the old pension scheme Central Civil Service (Pension) Rules, 1972. The retirement gratuity is payable to the retiring Government servant. A minimum of 5 years’ qualifying service and eligibility to receive service gratuity/pension is essential to get this one time lump sum benefit. Retirement gratuity is calculated @ 1/4th of a month’s Basic Pay plus Dearness Allowance drawn before retirement for each completed six monthly period of qualifying service. The maximum retirement gratuity payable is 16½ times the Basic Pay, subject to a maximum of Rs. 10 lakh. If the Government Servant dies while in service, the death gratuity shall be paid to his family at rates furnished in the table below:  

Sl. No.	Length of Qualifying Service	Rate of Death Gratuity
1.	Less than one year	2 times of emoluments
2.	One year or more but less than 5 years	6 times of emoluments
3.	5 years or more but less than 20 years	12 times of emoluments
4.	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.

Maximum amount of Death Gratuity admissible is Rs, 10 lakh with effect from 1.1.2006. 

This was stated by Minister of State for Finance, Shri Namo Narain Meena, in written reply to a question in the Lok Sabha today.
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PIB
(Release ID :95539)