Central Government and State Government Employee Retirement age and their Benefits
Central government employees could soon hear news that will come as music to their ears. The government is mulling increasing the retirement age and the pension amount. The proposal has been put forward by the Prime Minister’s Economic Advisory Committee, as per a Zee News Hindi report. The proposal reportedly talks about increasing the age of retirement and initiating a Universal Pension System in the country.
Social security for senior citizens
As per the committee’s report, a recommendation is made under which the employees must be given a minimum pension of Rs 2,000 per month. The committee has sought for better provisions for senior citizens. Pensioners could benefit from this plan.
Importance of skill development
It has been stated in the report that to increase the time span of employment, the age on retirement will need to be extended. This may be done to ease the stress on the social security system. The report also talks about skill development for those above 50 years of age.
The report also suggests that the central and the state government should create policies which encourage skill development and talent. These efforts should also include those working in the unorganized sector, in remote areas, people from refugee, migrant communities without adequate resources to get formalised training. This would ensure no department struggles with a shortage of skilled people.
As per World Population Prospectus 2019, India will be home to nearly 32 crore senior citizens by the year 2050. This would mean that 19.5% of the population will be retired. In comparison, around 14 crore or roughly 10% of the population was in this category in 2019.
Retirement Benefits
pension
A Central Government servant has an option to commute a portion of pension, not exceeding 40% of it, into a lump sum payment. No medical examination is required if the option is exercised within one year of retirement. If the option is exercised after expiry of one year, he/she will have to under-go medical examination by the specified authority.
Lump sum payable is calculated with reference to the Commutation Table. The monthly pension will stand reduced by the portion commuted and the commuted portion will be restored on the expiry of 15 years from the date of receipt of the commuted value of pension. Dearness Relief, however, will continue to be calculated on the basis of the original pension (i.e. without reduction of commuted portion).
Retirement Gratuity
This 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 on the date of retirement for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable for qualifying service of 33 years or more is 16½ times the Basic Pay plus DA, subject to a maximum of Rs. 20 lakhs.
This is a one-time lump sum benefit payable to the nominee or family member of a Government servant dying in harness. There is no stipulation in regard to any minimum length of service rendered by the deceased employee. Entitlement of death gratuity is regulated as under:
| Qualifying Service | Rate |
| Less than one year | 2 times of basic pay |
| One year or more but less than 5 years | 6 times of basic pay |
| 5 years or more but less than 11 years | 12 times of basic pay |
| 11 years or more but less than 20 years | 20 times of basic pay |
| 20 years or more | Half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments. |
Service Gratuity
A retiring Government servant will be entitled to receive service gratuity (and not pension) if total qualifying service is less than 10 years. Admissible amount is half month’s basic pay last drawn plus DA for each completed 6 monthly period of qualifying service. Dues owed by the retiring employees on account of Licence Fee for Government accommodation, advances, over payment of pay and allowances are required to be assessed by the Head of Office and intimated to the Accounts Officer two months in advance of the date of retirement so that these are recovered from retirement gratuity before payment. For this purpose, the Licence Fee for those in occupation of Government accommodation is taken into account up to the end of the permissible period for which accommodation can be retained after retirement under the Rules on normal rent. The recovery of Licence Fee beyond that period is the responsibility of the Directorate of Estates.
As per General Provident fund (Central Services) Rules, 1960 all temporary Government servants after a continuous service of one year, all re-employed pensioners (Other than those eligible for admission to the Contributory Provident Fund) and all permanent Government servants are eligible to subscribe to the Fund. However, these rules are not applicable to any of the Government Servants who join service on or after 1.1.2004. A subscriber, at the time of joining the fund is required to make a nomination, in the prescribed form, conferring on one or more persons the right to receive the amount that may stand to his credit in the fund in the event of his death, before that amount has become payable or having become payable has not been paid. A subscriber shall subscribe monthly to the Fund except during the period when he is under suspension. Subscriptions to the Provident Fund are stopped 3 months prior to the date of superannuation. Rates of subscription shall not be less than 6% of subscriber’s emoluments are not more than his emoluments. Rate of interest varies according to notifications of the Government issued from time to time. The rules provide for drawl advances/ withdrawals from the fund for specific purposes.
The conditions for withdrawal from the fund have been liberalized and now no documentary proof is required to be furnished by the subscriber for GPF withdrawal. On retirement of a subscriber, instructions have been issued for immediate payment of final balance on retirement. No application is required to be submitted by the subscriber for final payment from the fund.