Retirement Benefits – Kinds of Pension, Calculation, Eligibility, Gratuity, Commutation etc.
Retirement Benefits – Kinds of Pension, Calculation, Eligibility, Gratuity, Commutation etc.
RETIREMENT BENEFITS
SOUTH CENTRAL RAILWAY
Vijayawada DIVISION
PERSONNEL DEPARTMENT
DISCLAIMER
Any person entering a railway service on or after the 16th November, 1957 to 31.12. 2003.is eligible pension.
The under mentioned Settlement dues are applicable to those appointed prior to 01.01.2004. [All those appointed after 01.01.2004 are covered under New Pension Scheme].
NR(Superannuation): – Attain 60 years of age
ONR: – 1. VR 2. Death 3. MD/VR 4. CR 5. Technical Resignation 6. Resignation 7. Removed 8. Missing
Kinds of Pension: – 1. SUPERANNUATION PENSION 2. RETIRING PENSION 3. COMPENSATION PENSION 4. INVALID PENSION 5. COMPULSORY RETIREMENT PENSION
KINDS OF PENSION
SUPERANNUATION PENSION- Superannuation pension is granted to an employee who retires on attaining the age of superannuation. i.e., 60 years.
RETIRING PENSION- Retiring pension is granted to an employee who is permitted to retire after 55 years of age or 30 years of service or after 20 years of qualifying service under voluntary retirement scheme.
COMPENSATION PENSION- Compensation pension is granted to an employee who is discharged from service owing to abolition of post unless appointed to another post.
INVALID PENSION-Invalid pension is granted to an employee when he opts for retirement due to medical unfitness or medical de categorisation.
COMPULSORY RETIREMENT PENSION- It is granted to Railway servants who are compulsorily retired from Railway service as a penalty. However Competent Authority at his discretion can pass orders either to grant full pension or 2/3rd pension & gratuity or both. However, in case of Gazetted Officers wherever pension/Gratuity is reduced UPSC should be consulted.
PROVISIONAL PENSION- A Railway servant who has retired from Railway service on attaining the age of superannuation or otherwise and against whom any departmental or judicial proceedings are instituted or where departmental proceedings are already under process, a provisional pension shall be sanctioned. The provisional pension is calculated on the basis of qualifying service up to the date of retirement, or if he was under suspension on the date of retirement, up to the date immediately preceding the date on which he was placed under suspension. It is payable up to the date on which final orders are passed by the Competent Authority after conclusion of Departmental / Judicial proceedings. The gratuity will be withheld till the finalization of Departmental / Judicial proceedings and issue of final orders. The provisional pension paid shall be adjusted in the final retirement benefits.
COMPASSIONATE ALLOWANCE- Whenever Railway employee is removed or dismissed from service shall forfeit his pension and gratuity. However, the Disciplinary Authority concerned who has imposed the penalty of removal / dismissal may at his discretion sanction the compassionate allowance not exceeding 2/3rd of pension / gratuity or both which would have been admissible to him had he retired on compensation pension.
TO SANCTION PENSION/FAMILY PENSION THE FOLLOWING DOCUMENTS ARE REQUIRED
- QUALIFYING SERVICE
- PENSION BOOK LETS
- FORM NO 10 & 11
- AADHAR CARD
- BANK DETAILS/UNDER TAKING FORM
- PHOTOS (SINGLE/FAMILY AND FAMILY MEMBERS)
- FAMILY DECLEARATION (WHILE IN SERVICE)
- NAMINATION FORM
- LAST PAY SLIP
- PAN CARD/NPS CASE REQUIRED ORIGINAL PRAN CARD
Normal/Voluntary Retirement | Death |
Provident fund (Own contribution) plus interest as per Rule No.74(4) of Railway Services (Pension) Rules- 1993 | Provident fund (Own contribution) plus interest |
Monthly pension | Monthly Family Pension |
Commutation of pension | Deposit Linked Insurance subject to conditions |
Retirement gratuity as per Rule No.70 of Railway Services (Pension) Rules-1993 | Death Gratuity |
CGE Group Insurance Scheme (Saving Fund value with interest) | Group Insurance (Full insurance value + saving fund value with Interest) |
Encashment of Leave In terms of Rule 519(A)ds of IREC Vol.I | Encashment of Leave |
Composite Transfer grant | Composite Transfer Grant |
The following are the benefits given to the staff on retirement or to the family in case of death of the employees.
Settlement Pass | Settlement Pass |
Post-retirement Passes | Widow Passes |
Medical facilities under RELHS, 1997 | Medical facilities under RELHS, 1997 |
Fixed medical allowance | Fixed medical allowance |
Retention of Railway Quarters (Up to specified period only) | Retention of Railway Quarters (Up to specified period only) |
Benefit of staying in Holiday Homes/Officers’ Rest Houses | Appointment on Compassionate Grounds |
HOW PENSION IS CALCULATED?
Pension shall be calculated at 50% of the last Pay (pay in the Pay Band + Grade Pay) drawn by the employee at the time of his/her the minimum pension granted to a Railway Servant is Rs.9000/- per month and maximum pension is Rs. 1,25,000/- as per 7th PC.
Formula for Non-Running Staff:
Basic Pension= Pay in Pay band + Grade Pay/2 +Dearness Relief Example: Basic Pay Rs.41100/2=20550+DA original pension
Formula for Running Staff:
In case of Running Staff, pay element shall also include 55% of the pay for reckoning emoluments. Hence Basic Pension:
= (Pay in Pay Band + Grade Pay) +(55% of Pay in the Pay Band + Grade Pay)/2 + Dearness Relief
Example: Basic Pay Rs.70000+38500=108500/2=54250+DA original pension
Dearness Relief is paid basing on the basic pension to the employee which varies from time to time. This payment of dearness relief is based on the amount of pension sanctioned originally without reducing the commuted value.
Average emoluments shall be determined with reference to the emoluments drawn by a Railway servant during last ten months of his service. or LAST BASIC PAY WHICH EVER IS MORE
WHO ARE ELIGIBLE FOR PENSION?
Permanent employees who retire on superannuation/ voluntary retirement/invalidation or are retired having a qualifying service of not less than 10 years
Temporary employees who retire on superannuation or invalidation after a qualifying service of not less than 10 years or who retire voluntarily after a qualifying service of 20 years or more.
COMMUTATION OF PENSION
Employees who are retiring on superannuation / voluntary retirement can commute up to 40% of the pension, without medical examination. This is a lumpsum payment. In case of medical unfitness / compulsory retirement as a measure of penalty and for those who have not applied for commutation within one year from the date of their retirement, this would be payable after medical examination. The application for commutation should be made within one year from the date of issue of retirement orders.
How is it calculated?
The lump-sum commutation value will be arrived at by multiplying the commuted portion of pension by a factor relevant to age next birthday x 12.
Age on next Birthday | Commutation value expressed as number of year’s purchase | Age on next Birthday | Commutation value expressed as number of year’s purchase | Age on next Birthday | Commutation value expressed as number of year’s purchase |
20 | 9.188 | 41 | 9.075 | 62 | 8.093 |
21 | 9.187 | 42 | 9.059 | 63 | 7.982 |
22 | 9.186 | 43 | 9.040 | 64 | 7.862 |
23 | 9.185 | 44 | 9.019 | 65 | 7.731 |
24 | 9.184 | 45 | 8.996 | 66 | 7.591 |
25 | 9.183 | 46 | 8.971 | 66 | 7.431 |
26 | 9.182 | 47 | 8.943 | 68 | 7.262 |
27 | 9.180 | 48 | 8.913 | 69 | 7.083 |
28 | 9.178 | 49 | 8.881 | 70 | 6.897 |
29 | 9.176 | 50 | 8.846 | 71 | 6.703 |
30 | 9.173 | 51 | 8.808 | 72 | 6.502 |
31 | 9.169 | 52 | 8.768 | 73 | 6.296 |
32 | 9.164 | 53 | 8.724 | 74 | 6.085 |
33 | 9.159 | 54 | 8.678 | 75 | 5.872 |
34 | 9.152 | 55 | 8.627 | 76 | 5.657 |
35 | 9.145 | 56 | 8.572 | 77 | 5.443 |
36 | 9.136 | 57 | 8.512 | 78 | 5.229 |
37 | 9.126 | 58 | 8.446 | 79 | 5.018 |
38 | 9.116 | 59 | 8.371 | 80 | 4.812 |
39 | 9.103 | 60 | 8.287 | 81 | 4.611 |
40 | 9.090 | 61 | 8.194 | – | – |
Formula
40% of Pension x 12 x commuted value as on age as on next birthday (i.e., on 61 years age)
A separate table is available for selecting commuted value as per birthday age.
Example (Rng or Non Rng)
If the employee’s basic monthly PAY is Rs 70000/- and due for retirement on 31.05.2022 after attaining the age of 60 years The employee can commute up to 40% of his/her pension as under: 40% of PENSION Rs. 35000×12 x 8.194 14000x 12 x 8.194 = Rs. 13,76,592
RESIDUAL PENSION: -After computing the Basic Pension as stated supra, the Portion of pension commuted shall be excluded and the amount so arrived shall be ‘Residual Pension’ which shall be paid as monthly amount to the pensioner till it is restored. However,
Dearness Relief is paid basing on the Basic Pension but not on residuary pension. In other words, this payment of DR is based on the amount of pension sanctioned originally without reducing the commuted value.
Restoration of commuted value of pension
The pensioner is entitled to apply to the pension disbursing authority for restoration of the commuted value of pension with effect from the date of completion of 15 years from the actual date when commutation was affected.
NOTE: Commutation has no effect on Family Pension. In case of demise of the employee before completion of 15 years, the family gets full family pension as per entitlement without any deduction towards commuted amount in the employee’s pension.
(R.B. Lr.No.SCR. F(E) III / 87 / PN / 1 / 7 dated 26.3.1987)
The additional quantum of pension/family pension available to the old pensioners/family pensioners shall be increased as follows:
Age of Pensioners/Family pensioner | Additional quantum of pension |
From 80 years to less than 85 years | 20% of revised basic Pension/ Family pension |
From 85 years to less than 90 years | 30% of revised basic Pension/ Family pension |
From 90 years to less than 95 years | 40% of revised basic Pension/ Family pension |
From 95 years to less than 100 years | 50% of revised basic Pension/ Family pension |
100 years or more | 100% of revised basic Pension/ Family pension |
FAMILY PENSION
It is a social security benefit paid monthly to the surviving widow/widower or minor child/parents wholly dependent on a Railway servant in the case of death of the employee irrespective of whether death occurs during service or after retirement. This is also payable to families of removed/dismissed employees if they were in receipt of compassionate allowance at the time of death. Post retiral spouse is also eligible for family pension.
Calculation of Family Pension
The amount of family pension is calculated @ 30% of pay (Pay in the Pay Band + Grade Pay) subject to a minimum of Rs. 9000/- plus dearness relief admissible from time to time. Qualifying service is irrelevant for sanction of family pension at normal rates.
The period for which enhanced family pension payable to the family of a railway servant who dies in service, is extended to ten years without any upper age limit. In case of death of Railway servant after retirement, enhanced Family Pension shall be paid for seven years or for a period up to the date on which the retired deceased Railway servant would have attained the age of 67 years had he survived whichever is less.
RETIREMENT GRATUITY
It is a lump sum payment granted to a Railway servant or his/her nominee on his/her retirement or medical invalidation.
How is it calculated?
Railway employee who has completed 5 years of qualifying service is entitled for retirement gratuity. The gratuity depends upon the qualifying service and the last pay and grade pay drawn by the employee. It is calculated at the rate of half of the emoluments for each completed six monthly period of qualifying service subject to a maximum of sixteen and half times the emoluments and the total amount should not exceed Rs. 20,00,000/- (Rupees Twenty lakhs). The ceiling on gratuity will increase by 25% whenever the D.A rises by 50% of the basic pay.
Formula for Non-Running Staff
Gratuity = (Pay in the Pay Band + Grade Pay + DA) x Qualifying Service/2.
EXAMPLE 1
If an employee is retiring with 33 years qualifying service and his Basic Pay is Rs. 50500/- in pay band Rs. 9,300-34,800 with GP Rs4,200(Level 6), current DA @ 38% (as on 01.07.2022) @ Rs.19190
Retirement Gratuity Rs. (50500+19190) x 33/2 = Rs.11,49,885
Formula for Running Staff
In case of Running Staff, 55% of Basic Pay will be treated as Pay rating the Running Allowance. Gratuity = Pay* + DA** x Qualifying Service /2
*Pay = Pay + 55% of Pay
** DA = (Pay + 30% of Pay) x DA as on the date of retirement
EXAMPLE 2
If an employee is retiring with 21.5 years qualifying service and his Basic Pay is Rs. 64,100/- in pay band Rs. 9,300-34,800+4200GP (Level 6), current DA @ 38% (as on 01.07.2022) @ RS=.31665
Retirement Gratuity Rs. (99355+31665) x 21.5/2 = Rs.14,08,465= In case of Death Gratuity: If a Railway servant dies while in service, the amount of death gratuity shall be paid to the family in the manner indicated in the Table below:
S. No. | Length of qualifying service | Rate of gratuity |
(i) | Less than one year | 2 times of emoluments |
(ii) | One year or more but less than 5 years | 6 times of emoluments |
(iii) | 5 years or more but less than 11 years | 12 times of emoluments |
(iV) | 11 years or more but less than 20 years | 20 times of emoluments |
(v) | 20 years or more | Half of emoluments for every completed six monthly period of qualifying service subject to maximum of 33 times emoluments provided that the amount of death gratuity shall in no case exceed Rs. 20,00,000/- (With increase by 25% whenever the DA rises by 50% of the Basic pay). |
RECOVERIES FROM GRATUITY
(I) Government dues if any, could be recovered from the retirement gratuity of an employee retiring and in the case of a deceased employee from death gratuity even without obtaining his consent. (Authority Rule 15 of RS(Pension) Rules 1993).
(II) The entire gratuity will be withheld in case the employee does not vacate the railway accommodation provided to him and also in cases where any department or judicial proceedings are pending.
POST RETIREMENT BENEFITS
CENTRAL GOVERNMENT EMPLOYEES’ INSURANCE SCHEME 1980 [CGEIS 1980]:
Rate of Subscription & Corresponding Insurance cover under CGEIS 1980.
Group of employees | 01.01.1982 to 31.12.89 | | From 01.01.1990 | ||||
Initial Recovery, (on joining on or after 2 January) | Recovery from next year | Insurance cover | | Initial Recovery, (on joining on or after 2 January) | Recovery from next year | Insurance cover | |
(1) | (2) | (3) | (4) | | (5) | (6) | (7) |
Group ‘A’ | Rs.24 | Rs.80 | Rs.80000 | | Rs.40 | Rs.120 | Rs.120000 |
Group ‘B’ | Rs.12 | Rs.40 | Rs.40000 | | Rs.20 | Rs.60 | Rs.60000 |
Group ‘C’ | Rs.6 | Rs.20 | Rs.20000 | | Rs.10 | Rs.30 | Rs.30000 |
Group ‘D’ | Rs.3 | Rs.10 | Rs.10000 | | Rs.5 | Rs.15 | Rs.15000 |
CGIES ’80 being good social security was introduced w.e.f. 01.01.1982 on Railways vide letter dated 21.11.1980.
This is intended to provide for employees, the twin benefits.
(1) an insurance cover to help the family in the event of death while in service and
(2) payment of lump sum payment to augment resources on retirement, at a low cost, and on a wholly contributory and self-financing basis.
Family will be paid: –
(i) The Insurance Cover amount; and
(ii) An amount equal to the portion of subscription credited to the ‘Savings Fund’ together with the accumulated interest thereon.
In the event of cessation, other than death: – In the event of cessation, other than death, a substantial part of subscription together with compound interest would be paid back to the employee when they cease to be Railway employees, in accordance with the “Tables of Benefits for the savings fund for the relevant period” as circulated from time to time.
LEAVE ENCASHMENT
Leave salary is a lump sum onetime payment of the un availed leave at credit at the time of retirement or death. This is limited to the maximum of 300 days of LAP.
In case any short fall of 300 days LAP, LHAP from his/her credit will be taken for the purpose of leave encashment to the extent of shortfall of number of days of LAP.
Formula for LAP encashment:
(Pay in Pay Band + GP + DA) | X | No. of days of LAP subject to a maximum of 300 days 30 |
30 |
For LHAP encashment:
(Pay in Pay Band + GP + DA) | X | No. of days of LHAP to the extent of shortfall of LAP subject to maximum of 300 days of LAP & LHAP |
30 x 2 |
Composite Transfer Grant
In the event of retirement, the Railway employee and his family and in the event of death of the employee, his family members are eligible for Composite Transfer Grant (CTG) to settle down at places other than the last station on duty located at a distance of more than 20 Kms. Application for CTG should be submitted within one year from the date of retirement/death. Power to condone delay beyond one year and up to two years wrests with AGM. In situations where the personal effects were moved beyond two years, Railways Boards sanction is necessary. CTG will not be paid as long the Railway accommodation, if any, provided to the retired staff is vacated.
CTG on retirement: – Composite Transfer Grant shall be admissible on the same lines as on transfer in respect of staff on retirement to settle down at places other than the last station(s) of their duty located.
CTG in case of death while in service: – The members of family in the event of death of an employee shall, besides free pass, be also eligible for the transfer allowance/ Composite Transfer Grant
Rates of CTG admissible:
(a) The Composite Transfer Grant shall be paid at the rate of 80% of the last month’s basic pay in case of transfer involving a change of station located at a distance of or more than 20 kms from each other.
(b) ln cases of transfer to stations which are at a distance of less than 20 kms from the old station and of transfer within the same city, one third of the composite transfer grant will be admissible, provided a change of residence is actually involved.
PROVIDENT FUND &DLI: –
This is paid to the employee at the time of retirement from his/her own contribution together with interest hereon. The employee can exercise nomination to avoid delay in settlement in the event of his/ her unfortunate death. He/she can nominate one or more persons for receiving the PF amount. In case, he/she nominates more than one person, percentage of shares to be paid to each should also be indicated. In case of death while in service, the family shall be paid DLI as detailed below:
On the death of a subscriber to the State Railway Provident Fund (S.R.P.F.) the person entitled to receive the amount standing to the credit of the subscriber shall be paid by the Accounts Officer an additional amount equal to the average balance in the account during the three years immediately preceding the death of such subscriber, subject to the conditions.
Special Pass
One set of free passes may be issued to retiring Railway employee or in the event of demise to the person or persons entitled to receive payment of settlement dues when called for the purpose of receiving such payment. The Class of Pass to which he/she was entitled on privilege account before retirement/death is applicable in this case.
Settlement Pass
Railway employee, in the event of retirement or widow/widower in the event of death of the employee, may be issued Passes for self and family members/dependent relatives for the transportation of personal effects to the place where he/she intends to settle after retirement/death. Application for settlement passes should be submitted within one year from the date of retirement/death of the employee.
Post Retirement Complimentary Pass
Category | No. admissible in one year |
Group-`A’ & `B’: | With Railway Service of 20 years or more 3 sets – w.e.f. 01.01.2006 (*) |
Group-`C’: | With Railway Service of 20 years or more 2 sets – w.e.f. 01.01.2006 (*) |
Group-`D’: | With Railway Service of 20 years or more 1 set – w.e.f. 01.01.2006 (*) |
PRC passes can be drawn at the place of their choice —. Item [ii] of schedule IV
PRC passes…During the year of retirement. In the year in which the Railway Servant retires from service, he is entitled to that number of single journey PRC passes which represents the difference between the number of privileges passes he is normally entitled to in a calendar year while in service and the number actually availed by him, provided the total number of PRC passes availed after the date of retirement does not exceed the number of PRC passes for which he is entitled in a calendar year [Item [v] of schedule IV]
Disallowance of PRC pass on unauthorized retention of Railway Quarters: One set of PRC pass shall be disallowed for every month of unauthorized retention of railway quarters by retired officers/staff. — SC 331/99
WIDOW PASS: Half the number of PRC Passes that the Railway Servant was either receiving at the time of his demise after retirement or in case of death while in service would be notionally eligible to receive by reckoning the date of death as the date of retirement…The class of pass would be same as is admissible to the Rly employee on retirement or what would be admissible notionally if the date of death is reckoned as the date of retirement.
Widow Pass- Drawing from the office of their choice: – widows may be permitted to draw their WC Passes from the Offices located in or near their place of residence ….SC 85/97
Passes to widowers: -The facility of passes available to the widow of a male Railway employee shall be available to the widower of a female Railway employee.” SC116/98
RAILWAY EMPLOYEES LIBERALISED HEALTH SCHEME (RELHS) -97
Joining of RELHS-97 has been made MANDATORY for all retiring Railway Employees w.e.f., 16.03.2009 in terms of Board’s instructions circulated under Locarno. 43/09.
In case the retiring officer / staff is unwilling to join the scheme, he/she will have to submit
his/her unwillingness in writing with a clear understanding that no further chance shall be given to join the scheme in future.
The rates of contribution to join RELHS shall be last month’s basic pay drawn or the subscription rate indicated at different levels (as per 7th CPC) enumerated in the table below whichever is lower.
S No | Levels in the pay matrix as per 7th CPC | Subscription rate to join RELHS (in Rs.) |
1. | Level: 1 to 5 | 30,000 |
2. | Level: 6 | 54,000 |
3. | Level: 7 to 11 | 78,000 |
4. | Level: 12 and above | 1,20,000 |
FIXED MEDICAL ALLOWANCE
At present fixed medical allowance @ Rs. 1000/- p.m. is granted to the Railway Pensioner/family pensioner subject to
(i) residing in areas beyond 2.5 Kms of Railway Hospital/Health Unit for meeting expenditure on their day-to-day medical expenses that do not require hospitalisation.
(ii) The pensioner/ family pensioner is not availing the facility of OPD [except in cases of chronic diseases].
Railway Quarters
Permissible periods for retention
RETIREMENT: -An employee on NR/ VR/ CR may be permitted to retain the non-earmarked Railway accommodation for a period of 4 months on payment of normal rent/flat rate of license fee/rent and the next 4 months on educational or sickness account on payment of special license fee, i.e., double the normal rent or double the flat rate of license fee/rent. MC 49; SC 4/2001 & SC 119/01
The cases of retirement on medical invalidation are also to be treated at par with NR
RESIGNATION/DISMISSAL/REMOVAL: An employee who resigns from service or is dismissed or removed from service may be permitted to retain the railway quarter for a period of one month only on payment of normal rent/flat rate of licence fee. [Ref: No. E[G]85 QR1-9 dated 15-1-90] … Para 10.28 of Revised MC 49 [RBE 35/2007
DEATH: In case of death up to 12 months on normal rent, further 12 months on normal rent provided that the deceased or his /her dependants do not own a house at the place of posting.
MISSING CASES: – In super session of SC 41/97, decided that the family of missing Railway employee may be permitted retention of Railway quarters for a period of one year on payment of normal rent from the date of lodging of FIR (the period from the date from which the employee is missing till the date of filing FIR would automatically get regularized) with the police by the family of missing Railway employee. On the certification of the police authorities that the missing employee is not traceable and the whereabouts of the person could not be known, the family of the missing employee may be permitted further retention for a period of one year on payment of normal rent……SC 141/02.
CHECK LIST OF DOCUMENTS RECEIVED DURING SETTLEMENT FUNCTION
1) Service certificate
2) Pension payment order
3) ID Cum Medical (RELHS) card
4) Pass authorisation letter
5) Gold plated silver medal (Only in case of Normal retirements and Vol Retirement)
* * *
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