New Pension Scheme (NPS) v/s Old Pension Scheme

NPS is far beneficial than Government Pension – Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension 
 
The Central Government employees who have joined after 1/1/2004 and are put under National Pension Scheme (NPS) have been demanding abolition of NPS and have been persuading the Central Government to make the government pension scheme applicable to them.

This only exhibits their ignorance of the fact that the New Pension Scheme is highly lucrative and make the government employees who joined after 1/1/2004 far richer than the government employees who enjoy government pension scheme. By doing so they are in the process of ruining the great fortunes that lies in store under New Pension Scheme. Let me compare both the scheme:

Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension
 
Benefits under NPS

Let me take a case of Upper Division Clerk(UDC) who joins government service in 2014 at the age of 25 and renders 35 years of service till attaining 60 years of age. He / She gets 3% annual increment every year and gets one promotion every 10 year under M.A.C.P. Although he / she is likely to get 14 to 20% increase in D.A every year as per Consumer Price Index I just take 12%(assuming 6 + 6%) 2 times D.A in a year

* MACP / Promotion Years

(A) Therefore, the total pension wealth of a government servant who joined in 2014 and retiring under New Pension Scheme shall at the time of his retirement be Rs. 2,87,26,201/-

(B) 60% of the lump-sum pension wealth which he / she will be getting on retirement:
Rs.1,72,35.720

(C) 40% invested in an annuity scheme which he / she can receive before 70 years:
Rs.1,14,90,481

(D) Earned Leave Encashment: Rs. 215625 x 10 months : Rs. 21,56,250
TOTAL of (A) (B) (C) and (D) will be Rs. 3,08,82,451

Death Gratuity:
Although not entitled for retirement gratuity, but eligible for Death Gratuity If died during the service

Monthly Pension:
At the assumed Interest at the rate of 8.7% per annum on the other 40% of pension wealth of Rs.1,14,90,481 invested in annuity shall fetch  monthly pension of at least : Rs.83,306/ –
Not only this, before he / she attains the age of 70 he / she can withdraw the remaining 40% of his pension wealth of Rs. 1,14,90,481/- which if invested in Fixed Deposit of a nationalised bank can fetch interest and take care of not only of his wife and children but his descendants also for generations to come.

This is just a tip of the iceberg. If we consider the other 4 pay commission benefits that materialize on1/1/2016, 1/1/2026, 1/1/2036 and 1/1/2046 which a NPS pensioner who joins as UDC shall be getting before his retirement in 2049,his total pension wealth will be undoubtedly double the above amount which comes to more than Rs.5 crores. While a person who joins as U.D.C. gets this much, one will be rocked out of stupor to know what a Group A officer who renders 35 years of service may get – undoubtedly his total pension wealth will be more than Rs.10 crores.
 
Benefits under Central Government Pension Scheme

Now let us see what will be the retirement benefits of the above person if he / she is put in government pension scheme:

1.Gratuity for 16.5 months :
Rs.2,15,625 x 16.5 months = Rs.35,57,812/- Restricted to Rs.10,00,000
 
2. Earned Leave Encashment:
Rs. 215625 x 10 months : Rs.21,56,250
 
3. Pension Commutation:
Rs.17195 x 40% = Rs.6878 x 12 x 8.194 years Rs 6,76,300
Total Benefits under Central Government Pension Scheme: Rs.38,32,550
 
4. GPF Balance:
As it is a general tendency of the government servants to withdraw from GPF frequently, there will be very little left at the time of retirement
 
5. Monthly pension

i) Rs.34390 / 2 = Rs.17195 (basic pension being 50% of pay and grade pay Less 40% of basic pension towards commutation (Rs 6878) which will be restored after 15 years
Balance basic pension is Rs. 10317

ii) DA @ 527% of basic pension of Rs.17195 = Rs. 90617 (subject to increase in DA every 6 months based on consumer price index)
Total pension is Rs.1,00,934 per month.

After the death of government servant say after 67 years, spouse can take only 60% of the basic pension i.e.Rs.17195 x 60% = Rs.10317 plus D.A.at the prevailing rates. After spouse’s death children are unlikely to draw the pension as they would have already crossed the age limit. Thus, unlike the dependents of NPS pensioners, there will be nothing left for financial security of the dependents of the government pensioners .
Thus it is unwise on the part of government servants who have joined after 1/1/2004 to demand for abolition of NPS scheme and grant of government pension.

Mr.M.Dorai
Deputy Director
ESIC Model Hospital,
Bangalore (Ministry of Labour, Government of India) is the author of this Article.

Government pulls up ministries on pension delay issue, sets October 15 deadline for report

Government pulls up ministries on pension delay issue, sets October 15 deadline for report

NEW DELHI: The government has raised objections to delay in starting pensions to retiring officials because their respective departments fail to issue a certificate validating the service five years before they actually retire. All ministries have now been asked to study the case of each soon-to be retiring employee to avoid such an occurrence.

The PM-led ministry of personnel has written to all ministries on September 16 that they need to submit a report by October 15 in this regard and non-compliance with the statutory requirement of issuing the said certificate “may be viewed seriously”.

As per the existing rules, a certificate regarding ‘qualifying service’ is required to be issued by the Heads of Offices after completion of 18 years of service of an employee and again 5 years before the date of the person’s retirement. “It has been noticed that the certificates regarding qualifying service are not invariably issued to the government servant as required under the rules,” the letter stated.

“It has been observed by this department that processing of pension cases of the employees retiring quite often get delayed on account of the issues relating to verification of service. Although detailed instructions regarding verification of service have been issued by DoPT and by this department, these instructions are not meticulously adhered to resulting in delay in sanctioning of retirement benefit of the employees,” said the September 16 letter.

The letter specifies a format under which all ministries have to furnish a statement now by October 15 regarding the status of issue of service verification certificates. Each ministry has to specify the number of employees to whom the certificate has been issued after 18 years of their service and 5 years before their retirement, to whom the certificate is due and number of eligible employees in respect of whom the issue of certificates is in due process. The government is streamlining the system of pension issue, including introducing an Aadhaar-based online ‘annual life certificate’ submission system.

“It has been observed by this department that processing of pension cases of the employees retiring quite often get delayed on account of the issues relating to verification of service. Although detailed instructions regarding verification of service have been issued by DoPT and by this department, these instructions are not meticulously adhered to resulting in delay in sanctioning of retirement benefit of the employees,” said the September 16 letter.

The letter specifies a format under which all ministries have to furnish a statement now by October 15 regarding the status of issue of service verification certificates. Each ministry has to specify the number of employees to whom the certificate has been issued after 18 years of their service and 5 years before their retirement, to whom the certificate is due and number of eligible employees in respect of whom the issue of certificates is in due process. The government is streamlining the system of pension issue, including introducing an Aadhaar-based online ‘annual life certificate’ submission system.

Source: http://m.economictimes.com/

Grant of Night Duty Allowance on the basis of Actual Salary

Grant of Night Duty Allowance on the basis of Actual Salary – BPMS writes to OFB

BHARATIYA PRATIRAKSHA MAZDOOR SANGH
(AN ALL INDIA FEDERATION OF DEFENCE WORKERS)
(AN INDUSTRIAL UNIT OF B.M.S.)
(RECOGNISED BY MINISTRY OF DEFENCE, GOVT. OF INDIA)

REF: BPMS / OFB / NDA / 200 (8/2/L)

Dated: 14/09/2015

To,
The DDG (IR),
Ordnance Factory Board,
10 A, S.K.Bose Road,
Kolkata – 700001

Subject: Grant of Night Duty Allowance on the basis of Actual Salary

Reference: PC of A (Fys) Kolkata letter No. Pay/Tech-II/1206/2015/13, dated 09.09.2015

Respected Sir,

With due regards, it is submitted that the issue of payment of Night Duty Allowance based on actual salary, instead of notional pay of Rs.2200/- was resolved vide MOD ID No. 17(4)/2012/D(Civ-II), Dated 08.05.2015 in compliance of Contempt Petition (CP No. 200/2014 Shri Arvind Girija Singh & Ors versus UOI & Ors.) based on the CAT Jodhpur directions in CA No 34/2008 dated 5.11.2009 and subsequent ratifications by Hon’ble High Court and Supreme Court of India.

We are surprised to see the PC of A (Fys) letter cited under reference whereby ceiling for entitlement of Night Duty Allowance has been revised to Rs. 12380/- pay in Pay Band. We have strong objection on the issuance of this letter because PC of A (Fys) is not the competent authority to revise the ceiling of entitlement for NDA unilaterally as the original order has been issued by Ministry of Defence in consultation with Min of Finance, DoP&T, Def (Finance) and if there was any doubt regarding eligibility, PC of A (Fys) should have asked for clarification from the competent authorities through prescribed channels.

Further, all the court cases regarding revision of night duty allowance was related to the notional ceiling of Rs. 2200/- per month and this issue was resolved by ordering the NDA on the actual salary and nowhere court further fixed any real or notional ceiling. Even it has been already clarified in the earlier order which states that entitlement ceiling of Rs. 2200/- is not applicable to existing categories who are getting NDA. Prior to implementation of recommendations of 6th CPC, IEs / NIEs / NGOs upto Assistant Foreman (Technical) was entitled for Night Duty Allowance being a non-gazetted supervisory staff but now the post of Assistant Foreman is merged with JWM which is a gazetted supervisory post in OFB. Hence, all the Industrial / Non-Industrial & Non – Gazetted Supervisory staff are entitled for NDA on the basis of actual salary.

Therefore, you are requested to intervene into the matter so that all IEs/NIEs/NGOs may get the NDA as per actual salary in compliance with the court pronouncements in letter and spirit.

Thanking you.

Sincerely yours
sd/-
(M P SINGH)
General Secretary

Source: BPMS