Skip to content

NEW PENSION SCHEME 2004

September 9, 2011

 RBA 18/2010   No. 2008/AC-II/21/19 dated 13-07-2010 

. Sub: Additional Relief on death disability of Government servants covered by the Defined Contribution Pension System (NPS).

Please refer to Board’s letters of even number dated 29.05.2009 and :04.06.2010 on the. above subject in -terms of   which, interalia, a mechanism was required to be put in place for ensuring that the provisional Pi Os issued in case of NPS beneficiaries have a distinct identification and the. expenditure in such cases is accounted for in the stipulated account heads. It was also suggested to frame a joint procedure for the smooth. disposal of settlement cases of NPS  beneficiaries.

2. Instructions have since been issued by the Ministry of Finance vide their O.1\’1′. No. J (7)DCPS(t IJS)12009fI’Al22 r dated 02.07.2009 laying down the procedural guidelines 10r making the provisional payments to the eligible government servants/families in {he matter. A copy f these instructions dated 02.07.2009 i” enclosed which shall apply mutatis mutandis on the Railways.

No.l(7)/DCPS(NPS)/2009/TA/221 Office of the Controller General of Accounts Department of Expenditure Ministry of Finance

7lh Floor, Lok Nayak Bhavan, Khan Market, New Delhi -110003

Dated: 02.07.2009

OFFICE MEMORANDUM

Sub: Additional Relief’ on death/disability of Government servants covered by the Defined Contribution Pension System (NPS).

Reference is invited to Dept. of Pension and Pensioners Welfare’s O.M. 0.38/41/06/P&PW(A) dated 5-5-2009 regarding additional relief on death/disability of government servants covered by the Defined Contribution Pension System (NPS).

2. As per the above O.M. the following benefits have been extended to Central Civil Government Servants covered by the New Pension Scheme, on provisional basis:

(A) Retirement from Government service on invalidation not attributable to Government duty:

(a)          Invalid Pension calculated in terms of Rule 38 and Rule 49 of the

Central Civil Services (Pension) Rules, 1972

(b)          Retirement Gratuity calculated in terms of Rule 50 of the Central

Civil Services (Pension) Rules, 1972

(B)      Death in service not attributable to Government duty:

(a)         Family Pension (including enhanced family pension) computed in

terms of Rule 54 of the Central Civil Services (Pension) Rules, 1972

(b)         Death Gratuity computed in terms of Rule 50 of the Central Civil

Services (Pension) Rules, 1972

(C)      Discharge from Government service due to disease/injury attributable

to Government duty:

(a) Disability Pension computed in terms of the Central Civil Services (Extraordinary Pension) Rules.

x.

(b) Retirement gratuity computed in terms of the Central Civil Services (Extraordinary Pension) Rules read with Rule 50 of the Central Civil Services (Pension) Rules, 1972.

(D)      Death in service attributable to Government duty:

(a) Extraordinary Family Pension computed in terms of Central Civil Service (Extraordinary Pension) Rules and Scheme for Liberalised Pension A wards.

(b) Death Gratuity computed in terms of Rule 50 of the Central CiviI Services (Pension) Rules, 1972.

The employee / his family will also be paid Dearness pension/ Dearness relief admissible from time to time in addition to the above benefits, on provisional basis.

3. The procedure for making the above provisional payments to the eligible government servants/ families has been under consideration of this office. With a view to expediting these payments it has been decided that the work relating to release of pensions in respect of such Central Civil pensioners should be centralized and entrusted to the Central Pension Accounting Office. In this regard the following guidelines are issued for compliance by Drawing & Disbursing Officers (DDOs), Heads of Offices(HOO) ,Pay & Accounts Offices (PAOs), Central Pension Accounting Office (CPAO) and the banks where pensioners I family pensioners are I will be holding pension accounts.:-

  1. The Head of Office (HOO) will prepare the pension paper as per the provisions of the relevant rules and will submit the same along with all the relevant documents and requisite number of photographs the particulars of the bank Account of the pensioner (viz. Name of Bank, Name of Branch, full postal address of Branch with PIN, 7 digit BSR Code, lFSC Code etc.) to the Pay and Accounts Office concerned. The HOO will be responsible for the correctness of the bank details of the beneficiary. The Penn anent Retirement Account Number (PRAN) of the concerned Government Servant allotted by National Securities Depository Limited will also be indicated.

II.      The HOO will also obtain and forward, along with the pension papers, a copy of the Undertaking from the pensioner I family pensioner to the effect that he has understood the provisions of Paras 6, 7 and 8 of Dept. of Pension & Pensioners’ Welfare OM No. 38/4I/06/P&PW (A) dated 5-5- 2009 and that any payment found to be in excess of his / her entitlement will be refunded to Government / adjusted out of his/ her final entitlements-(vide Annexure I to this O.M.)

  1. Pay and Accounts Office, after scrutinizing the pension papers will finalise the pensionary entitlements as admissible under the above said OM
  2.       /relevant rules/orders and     Issue authorities for pension/family

Pension / Gratuity.

IV.     Pay and Accounts Office will record the entitlements admitted, in the Service Book of the Government Servant under the signature Of the Pay and Accounts Officer.

v.         Necessary entries with regard to the issue of authorities will be made in the

Registers maintained by Pay and Accounts Officer. While the payment of gratuity .will be, made :by ‘Pay and Accounts Officer, on the basis of authority issued ‘by him, Pension / family pension will  be. paid only to the

Bank accounts ,of the  pensioners by CPAO. ,d ~,:,; ,”                              :’

VI.            Pensioners in their interest may be encouraged to open their accounts with bank branches having Real Time Gross Settlement (RTGS)/ National Electronic Funds Transfer System (NEFT) facility, failing which. Core

I’        Banking Solutions (CBS) facility .

. vn.       Pensioners may open joint Account with spouse only (to whom family pension is payable in the event of death of pensioner). The conditions stipulated if! para 4 an~. elsewhere in the scheme for “Payment of Pensions to Central Government Civil Pensioners through Authorised Banks” would apply.

viti.       The Pay and Accounts Officer will allot an alphanumeric Serial umber ‘(Provisional Pension Payment Order) to each pensioner in the following manner. It will be prefixed with ‘N’ and the first 5 digits will represent the PAO code (after deleting the first digit 0 from the PAO code) followed by 2′ digits to denote the year, 3 digits representing serial number. The last digit which is a check number will be allotted by the system in CPAO.

ix.       Pay and Accounts Officer will issue special seal authority for pension/family pension (vide Annexure 2) to CPAO under intimation to the retired Government Servant/family of deceased Govt. Servant.

  1. PAO w1il’I issue a pension payment order in triplicate ‘~n the format prescribed. by CPAO ( Vide Annexure 3) ( disburser’s i,e. CPAO’~, Pensioners and ,Pension ACCOUl1 Holding Branch’s portions) and send It along with authority as prescribed by CPAO. Pay and Accounts Officer will have to” issue e-special seal authority  ie-PPO on receipt of orders to this effect from CPAO. ..

Xl.             CPAO will forward Pensioner’s and Pension Account Holding Bank Branch’s copies to the Bank Branch where the Account of the Pensioner is maintained. . The, Bank.s : copy: of PPPO should be used only for identification ·propose. And not for payment, .

XII.                CPAO wilt maintain an Index Register and maintain a separate data base in respect of all pensioners/family pensioners .to whom provisional payments   are made as per the Department of Pension and Pensioners Welfare’S O.M. dated 5-5-2009. The PPO issued will be scanned and archived in CPAO with photographs and signature of the pensioners.

The Banks are required to complete identification formalities of the pensioner as required under para 12 of the scheme for ‘Payment of Pensions to Central Government Civil Pensioners through Authorised Banks” and intimate CPAO electronically to enable commencement of credit of pension to the pensioner’s account. After identification of the Pensioner, his copy may be invariably handed over by the concerned branch.

The Pension Account holding Bank will have to obtain an undertaking that excess payment, if any, credited to his / her account, due to for refund of excess amount credited to his/her account due to delay in receipt of any material information or due to any bonafide error can be recovered. by the bank (as prescribed in Annexure XI to CPAO’s Scheme for “Payment of Pensions to Central. Government Civil Pensioners through Authorised Banks”).

On the basis of authority issued by the PAOs, CPAO wi JJ prepare a bill for drawing pension/family pension /additionaJ quantum plus Dearness Relief thereon and issue advice to its accredited bank for electronic transfer for crediting the account of pensioners/family pensioners held in various banks, by debit to CPAO’s (pension) Account. All amendments on account of revision will be issued by the PAOs and the revision authority (as per the format prescribed) will be sent to CPAO.

It will be the responsibility of CPAO to deduct Income Tax at source from payment of pension / family pension as’ applicable. Income Tax statement for the same will also be issued by them annually. For this relief under Income Tax by the pensioner will be sent by paying branch uploaded to CPAOs website after getting the same from the pensioner.

CPAO will issue advice to bank well in time so that- the accounts are credited to the banks accounts of pensioners/family pensioners on due dates.

The accredited bank of CPAO will issue electronic credit to the bank account of the pensioner/ family-pensioner based on the advice.

The Pension Account holding bank will be responsible for obtaining periodical certificates such as Life Certificate, Re-employment Certificate

etc. (as prescribed in CPAO’s Scheme for’ Payment of Pensions to Central Government Civil Pensioners through Authorised Banks”) and intimated electronically to CPAO on due dates. (Life certificate should be obtained on I SI May each year and intimation uploaded on CPAO s website.) Drawing of pensions/family pensions will be subject to the receipt of Life Certificate by CPAO.

XX.              Any change in the bank of the pensioner may be authorised with the Sank s portion by CPAO through the Pen ion Account Holding Bank. Fresh .identification of pensioner by new branch will be entailed. The account if closed by the Pensioner will be intimated ‘electronically by the bank to CPAO immediately.

xxi.       CPAO will be responsible for working out of arrears of Dearness Relief as and when they are sanctioned by Government and arrange to get it credited to the bank accounts of the pensioners/family pensioners.

XXII.                The accredited bank of CPAO will be asked to prepare separate scrolls for the e provisional pension payments and confirmations of credit to pensioner’ account for submission to CPAO.

XXIII.                  CPAO will issue pension slip, annual statements of income tax deducted and Due and Drawn statement in respect of any’ arrear payment to the pensioner / family pensioner through pension paying branch annually. A facility on CPAO’s website for online viewing by pensioners on the web will be enabled through passwords.

xxiv.          The normal procedure for reporting, reconciliation of government transactions will be followed by bank and CPAO (like non-pension transactions).

xxv.         It has been decided to open .separate head of account to book these payments in accounts. Those heads will be intimated separately.

xxvi.         At this stage the position is not clear as to what benefits will be finally admissible to the Government Servants covered under Defined Contribution Pension Scheme. Therefore, the mode of payments is also not clear. However the CPAO will maintain the data base 011 the benefits paid to each pensioner/family pensioner as per this Office Memorandum.

XXVII.                 However the responsibility for all recoveries mentioned in the OM dated 5-5-2009 shall be that of the concerned ministry of PFRDA and NPS disbursing authority. They shall work out of the final payments/recoveries as and when orders to this effect are issued by government.

xxviii.          In case of death of pensioner, the same may be ‘intimated to the pension account holding branch of the bank by the family members of the deceased immediately and bank will inform the same to CPAO electronically. The amount lying in the bank a count of the pensioner till the date of death is t be paid 0 the nominee (as per Nomination Rule 1983). If nomination is not  available with the bank, the amount v ill be paid to legal heirs of the deceased and lor excess amount  refunded as per debit advice issued by CPAO.

Xxix.     Discontinuation/Reduction of the Provisional Pension in respect ‘of any pensioner should be conveyed to CPAO _ at least one month before the next payment date by the concerned Mini try PAO.

xxx.     Invariably any correspondence between nodes of GOI should be endorsed to the pensioner.

***********************************************

             RBA 31/2009     No.200S/AC-W21119 dated:25.09.2009   .

             Subject:  Additional Relief on death/disability of Government servants covered by the New Defined Contribution Pension System (NPS).

*****

A copy of Department of Pension and Pensioners’ Welfare (DOP&PW)’s O.M. No. 38/41/06/P&PW(A) dated 51h May 2009 on the above subject is enclosed for information and compliance . These instructions shall apply mutatis mutandis on the Railways also.

2. Central Civil Services (Pension) Rules, 1972 and Central Civil Services (Extraordinary Pension) Rules, referred to in the enclosed O.M., correspond to Railway Services (Pension) Rules,1993 and Railway Services (Extraordinary Pension) Rules,1993. Ministry of Finance (Department of Economic Affairs)’s O.M. No. 5!712003-ECB & PR dated 22.12.2003 was circulated on the Railways vide Board’s letter No. F(E)1lI12003/PN 1/24 dated 31.12.2003. Rules 38 49,50 and 54 of CCS(Pension)Rules 1972, referred to in the enclosed O.M., correspond to Rules 55, 69 70 and 75 of Railway Services(Pension) Rules, 1993.

3. Accordingly a proposal for introduction of new accounts heads under Abstract 0- has been sent to Controller General of Accounts/ Ministry of Finance. Since it may take some rim the expenditure on the above may temporarily be booked under Abstract N- Suspense, under the following new sub/ detailed heads introduced vide ACS no. 101, enclosed herewith:

Sub head              130- Provisional payments under NPS

Detailed Head 131- Provisional superannuation and Retiring Pension 132- Provisional Invalid pension

133- Provisional Disability Pension

134- Provisional Extra ordinary Family pension 135- Provisional Retirement Gratuity

131′;- Provisional Death Gratuity

The amount booked there under would be accounted for under the relevant accounts heads after the same are notified. Necessary budget requirement may be projected accordingly.

Kindly acknowledge receipt and ensure compliance.,

No. 38/41/06/P&PW(A) Government of India

Ministry of Personnel Public Grievances and Pensions Deparbnent of Pension and Pensioners Welfare

                                                                        ******.

Lok Nayak Shawan, Khan Market, New Delhi-11 0 003 Dated 5th May, 2009

OFFICE MEMORANDUM

Sub: Additional Relief on death/disability of Government servants covered by the new Defined Contribution Pension System (NPS)

The undersigned is directed to say that the pension of the Government. servants appointed on or after 1.1.2004 is regulated by the new Defined Contribution Pension System (known as New Pension Scheme), notified by the Ministry of Finance (Department of Economic Affairs) vide their O.M. No. 517/2003-ECB 2 PR dated 22.12.2003.

2. On introduction of the New Pension Scheme, among others, the Central Civil Services (Pension) Rules, 1972 and the Central Civil Services (Extraordinary Pension) Rules were amended on 30.12.2003. Under the amended Rules, the benefits of Invalid Pension/Disability Pension and Family Pension/Extraordinary Family Pension/Liberalized Pensionary Award relief are not available to the Government servants appointed on or after 1.1.2004.

3. Ministry of Finance (Department of Economic Affairs) has subsequently clarified that the New Pension Scheme is a replacement for only pension under normal circumstances and family pension in case of death of employees after retirement.

4. A High Level Task Force (HLTF) constituted by the Government has recommended certain additional benefits that can be provided on death or. discharge on invalidation/disability of a Government servant covered by the New Pension Scheme. It is likely to take some time befor~e Rules regulating these benefits under the New Pension System are put in place.

5. Meanwhile, considering the hardships being faced by the employees appointed on or after 1.1.2004 w)ro are discharged on invalidation/disablement and by the families of such employees who have died during service since 1.1.2004, the President is pleased to extend the follOWIng benefits to Central Civil Government Servants covered by the New Pension Scheme, Q.Q provisional basis till further orders:

(I)               Retirement from Government service on invalidation not attributable to Government duty:

            (i)         Invalid Pension calculated in terms of Rule 38 and Rule 49 of the Central Civil Services (Pension) Rules, 1972.

Oi)          Retirement gratuity calculated in terms of Rule 50 of the Central Civil Services (Pension) Rules, 1972.

(II)        Death in service not attributable to Government duty :

(i)        Family Pension (including enhanced family pension) computed in terms of Rule 54 of the Central Civil Services (Pension) Rules, 1972.

(ii)        Death gratuity computed in terms of Rule 50 of the Central Civil Services (Pension) Rules, 1972.

(III)        Discharge from Government service due to disease/injury attributable to Government duty

(i)        Disability Pension computed in terms of the Central Civil Services (Extraordinary Pension) Rules.

(ii)        Retirement gratuity computed in terms of the Central Civil Services (Extraordinary Pension) Rules read with Rule 50 of the Central Civil Services (PensionjRules, 1972.

(IV)       Death in service attributable to Government duty:

(i)        Extraordinary F-amily Pension computed in terms of Central Civil

Services (Extraordinary Pension) Rules                    and Scheme for

liberalised Pensioary Awards.

(ii)        Death gratuity computed in terms of Rule 50 of the Central Civil Services (Pension) Rules, 1972.

The employee/ his family will also be paid Dearness Pension/Dearness Relief admissible from time to time in addition to the above benefits, on provisional

basis.                                                                            ..:.6

6. The above provisional payments will be adjusted against the payments to be made in accordance with t~Rules framed on the recommendations of the HLTF and recoveries, if any, will be made from the future payments to be made on the basis of those rules.

7. The recommendations of the HLTF envisage payment of various benefits on death/discharge of a Government employee after adjustment of the monthly­annuitised pension from the accumulated funds in the NPS Account of the employee. Therefore, no payment of monthly-annuitised pension witl be made to the employee/family of the employee during the period he/she is in receipt of the provisional benefits mentioned in para 5 above.

Please visit: http://pensionersportal.gov in

- 3 -

8. In cases where, on discharge/death of the employee, the amount of accumulated funds in the NPS Account have been paid to the employee/family of the employee, the amount of monthly-annuitised pension from the date of discharge/death will be worked out in accordance with the rules/regulations to be notified by the Department of Financial Services/PFRDA and the same will be adjusted against the payment of benefrts/relief after the notified rules in this respect are in place.

9. These instructions will be applicable to those Government servants who joined Government service on or after 1.1.2004 and will take effect from the same date i.e. 1.1.2004.

10.       This Order issues with the concurrence of Ministry of Finance

(Department of Expenditure) vide their U.O. No. 127/EV/2009 dated 13.4.2009.

(M.P. Singh) Director

  1. All Ministries/ Departments of Government of India
  2. As per standard mailing list

Please visit: http://pensionersportaLgov.in

Advance Correction Slip no. 101 to Indian Railway Financial Code, Volume II, 1996 Edition

***

Please introduce following new account heads under Minor head 100- Miscellaneous Advance Revenue of Abstract – suspense, with immediate effect:

Sub head               130- Provisional payment under PS

Detailed Head 131- Provisional Superannuation and Retiring Pen ion 132- Provisional Invalid pension

133- Provisional Disability Pension

134- Provisional extra ordinary Family pension 135- Provisional Retirement Gratuity

136- Provisional Death Gratuity

(Authority: Board’s letter No.2008/AC-IlJ211l9 dated 5.09)

RBA No. 11/ 2009 dated17.02.2009  No. 2004/AC-III2 III 1V01.II

Sub: New Pension System  

The various issues related to New Pension System (NPS) raised by the Zonal Railways etc have been examined in consultation with the Department of Expenditure, Ministry of Finance, the PFRDA and the Department of Pension & Pensioners Welfare and it is clarified as under:-

Query

Clarification

1.

Suspension Cases

Every subscriber shall subscribe monthly to the NPS when

on duty or foreign service but not during a period of

suspension.

-.

On exoneration or otherwise, the amount of subscription

shall be the emoluments to which he was entitled on the

first day after his return to duty.

If a subscriber elects to pay arrears of subscription in

respect of a period of suspension, the emoluments or

portion of emoluments which may be allowed for that

period on reinstatement, shall deemed to be emoluments

drawn on duty.

2.

Half Pay Leave The subscription of the employer and government would be

Cases restricted to that proportionate to leave salary.

3.

EOL Cases Since no salary is drawn during this period, no contribution

(Including on either from government employee or government would be

medical grounds) payable.

**************************************************************

RBA 40/2006                          Counting of Military Service.

No: 2004/AC·W21/1 Pt. II dated 04-08-2006

 Sub: Implementation of New Pension System  – Counting of Military Service for the purpose of Pensionary benefits –  

References have been received from Railways seeking clarifications as to whether a military pensioner re-employed in Railway service on o. after 1.1.2004, can be allowed to exercise the option under Rule 34 of Railway Services (pension), Rules, 1993, to draw combined pension taking into account the military service along with railway service treating him as a pre- 1.1.04 appointee. The matter has been examined in consultation with the Department of Pension & Pensioners’ Welfare and the position is clarified as under:-

All the fresh appointees joining service on or after 1.1. 04 will be inducted into New Pension Scheme as per orders of Department of Economic Affairs. Rule No. 19 of CCS (pension) Rules, 1972 which corresponds to Rule No. 34 of Railway Services (pension), Rules, 1993, is not applicable to the fresh employees appointed on or after 1.1.04. Accordingly, the military personnel who have been re-employed in civil or railway service on or after 1.1.04 will have no connection with CCS (pension) Rules, 19721 Railway Service (pension), Rules, 1993 and are required to be inducted into the New Pension Scheme.

Director Finance (CCA) Railway Board

RBA 39/2006 – Clarification on New Pension Scheme

No.2004/AC-1I/2111  Date: 01-8-2006

Sub: New Pension System.

While implementing the New Pension System (NPS), Zonal Railways have sought clarifications on various issues. These issues have been examined in Board’s office in consultation with the Department of Economic Affairs, Ministry of Finance, the nodal Department of the Government on NPS .The clarifications on certain issues as received from the Department of Economic Affairs are mentioned below, for information and necessary action.

 The procedure for calculation 0 f interest on the credit balance of the employees and Government contribution.Whether retirement gratuity is available to the employee covered under NPS?

What benefits will he/she get in the event of death in service?

Whether (both Government and employee’s) contributions towards Tier-I are taken as income for the purpose of Income Tax or it is to be exempted?

Can any individual continue to contribute under Tier-I even after the age of 60

Replies / Comments

As per advice of the Department of Expenditure, the same method as used for computing interest on OPF may be used.

Payment of Gratuity to Railway retirees is made under Railway Services (Pension) Rules 1993. The provisions of Railway services (Pension) Rules, 1993 are no more applicable to new entrants to railway Services w.e.f. 151 January 2004 after amendments made in the Railway Services (pension) Rules 1993 vide Notification No.FE(lII)/2003/PNI/38 (Amendment) dated 30.12.2003.

The deceased employee’s own contribution plus Government’s contribution plus interest @ 8% p.a. on both may be paid to the legal heirs immediately.

The Tax treatment 0 f the NPS in respect 0 f Central Government was provided for in the Budget 2004-05. The universally accepted formula  EET (Exempt, Exempt, Tax) has been adopted, that is, the contributions will be excluded from income for tax purposes. The accruals will also be exempt from tax’ ; and only the terminal benefits will be taxed at the applicable rate in the year of receipt.

Yes. However, in case of Government employees, the Government’s contribution

years? will cease when the employee reaches the I
age of 60 years.
6

As per Scheme the accumulation to fund

There are no provisions at present to

are payable to spouse/dependent/parents

payment of family pension.

in the

event of death during interim

period. It would imply that no investment

would be regulated in such cases? How

pensions of family will be regulated in

such cases?
7 Whether dependent

parents

can

be

The

pension

Fund

Regulatory and
nominated

to receive pension wealth

Development Authority

(PERDA)

will

when the spouse and the children of the

decide on investment schemes and benefits

employee are alive?

Under NPS.
8

What happens if the employee dies while

In such an event, the employee is to be

in service within one month from the

taken off the

record as far as NPS

IS

date of appointment i.e. before recovery

concerned,
towards pension contribution starts?
9

As per the scheme, during interim period

Procedural details (nomination, shares etc)

the accumulation under Tier-I shall be

are still to be worked out.

payable to spouse/dependent parents in

the event of death of employees. What

will be the percentage of share in which

payment will be made to them in absence

of nomination.

                ************************************************************

Railway Board’s letter No. 2004/AC-II/21/1 dated 19.2.04 (RBA No.5/04)

SUB: INTRODUCTION OF NEW PENSION SYSTEM

Attention is invited to Board’s letter No.F(E)III/2003/PN1/24 dated 31.12.03 on the above subject.  As stated therein, Government of India have introduced a new defined  Contributory Pension System for the new entrants to Central Government Service, except for Armed Forces in the first stage, replacing the existing system of defined benefit pension system vide Government of India, Ministry of Finance, Department of Economic Affairs notification dated 22.12.03 sent herewith.  The new pension system has come into operation w.e.f. 1.1.2004. The salient features of the new pension system are as under:-

(i)                  The new pension system is based on defined contributions, which will use the existing network of bank branches and post offices etc., to collect contributions and interact with participants allowing transfer of the benefits in case of change of employment and offer a basket of pension choices. The system is mandatory for all Government servants who join Government service on or after 1.1.04. It has two tiers i.e., Tier-I & Tier-II. In tier-I, Government servants shall compulsorily make a contribution at the rate of 10% of salary and DA and a matching contribution will be made by the Government (the term ‘salary’ in Ministry of Finance’s notification quoted above may be read as ‘basic pay’).  The contributions and investment returns would be deposited in a non-withdrawable pension tier-I account.  The existing provisions of defined benefit pension and SRPF/GPF would  not be available to the new recruits in the Central Government service joining Government service w.e.f. 1.1.2004.

(ii)                In addition to the above pension account, each  Government servant may also have a tier-II withdrawable account at his option.  This option is given as SRPF/GPF Rules are not  applicable to the new recruits joining the Central Government service w.e.f. 1.1.2004.  Government will not make any contribution to this tier-II account.  These assets would be managed through exactly the above procedures.  However, the Government servant would be free to withdraw part or whole of the second tier of his money any time.  This withdrawable account does not constitute pension investment and would attract no special tax treatment.

(iii)               A Government servant covered under the new system can exit at or after attaining the age of 60 years from the tier-I of the system. At exit, it would be mandatory for the individual to invest 40% of the pension  wealth to purchase an annuity from an IRDA regulated life  insurance company, which will provide for pension for the lifetime of the employee and his dependent parents/spouse at the time of retirement.  In the case of Government servants,  who leave the system before attaining the age of 60 years, the mandatory  annuitization would be 80% of the pension wealth.

(iv)              In order to implement the system, there will be a Central Record Keeping Agency (CRA) and several Pension Fund Managers (PFMs) to offer 3 categories of schemes to Government servant viz. Option A, B and C based on the ratio of investment in fixed income instruments and equities.  Option A would imply pre-dominant investment in fixed income instruments and some investment in equity.  Option B will imply greater investment in equity.  Option C will imply almost equal investment in fixed income instrument and equity.  An independent Pension Fund Regulatory and Development Authority (PFRDA) will regulate and develop the pension market.

(v)                As an interim arrangement, till such time a statutory PFRDA is established, an interim PFRDA has been appointed by Ministry of Finance. Further, till the regular Central Record keeping Agency (CRA) and Pension Fund Managers (PFMs) are appointed and the accumulated balances under each individual account  are transferred to them, Government has decided that Central Pension Accounting Office (CPAO) will function as CRA and such amounts representing the contributions made by the Government servants and the matching contribution made by the Government shall be kept in an account under Public Account of India as an interim arrangement.

2.         Accordingly, the following instructions are issued in consultation with Controller General of Accounts, Ministry of Finance for the guidance of Railways for implementation of the New Pension System during the interim arrangements referred to above:

a)                  The new pension system is effective from 1.1.2004.

b)                  The contributions payable by Railway servants towards the system under tier I and tier II will be recovered from their salary bills every month.

c)                  Pending formation of a Central Record Keeping Agency, Central Pension Accounting Office/Ministry of Finance will function as the Central Record Keeping Agency for this system.

d)                  The contribution towards the system under tier-I will be recovered at the rate of 10% of Basic Pay and DA from Railway Servants.

e)                  The system of voluntary contribution under Tier-II will not be operative during the period of interim arrangement. Therefore, no recoveries will be made from the salaries of the employees on this account during the above period.

f)                    Recoveries towards the contribution to tier-I of the system shall be effected from the Ist of the month following the month in which the Railway servant has joined the service.  No deduction will be made from his salary earned in the month of joining the service.

g)                  No deduction shall be made towards SRPF/GPF contribution from the Railway servant joining the service on or after 1.1.04, as the said scheme is not applicable to them.

h)                  (i)         Immediately on joining the service the Railway servant shall be asked by the bill drawing officer concerned to furnish the particulars viz., name, designation, scale of pay, date of birth, nominee for the fund etc; in the prescribed form (Annexure I). Each bill drawing officer will consolidate this information in respect of all the Railway servants, who have joined service during the previous month and submit it in the prescribed format (Annexure II) to the associate bill passing Accounts Officer by 7th of each month. Annexure I will be retained by the bill drawing officer and will be placed in the service book of the employee.

(ii)         Since the Pension Fund Account number and ledger thereof will be permanent records, the permanent accounting units viz., divisional/workshop/Headquarters Office etc.  only shall be nominated as Associate Accounts Office for this system and the project railways/construction offices may be attached to Divisional Accounts Office under whose regional jurisdiction such project/construction offices are situated. These offices after passing  of  salary  bills  will  transfer  the  salary debits to the concerned accounting units through transfer certificate for accountal against relevant work/expenditure head of account.  This will ensure proper maintenance of records, timely submission of information to CPAO for the present and timely flow of funds to PFMs when they come into being.

(iii)FA&CAO shall issue suitable local procedure order to ensure effective implementation of the new system.

(i)                  On receipt of the information (Annexure-II) from the bill-drawing officers, the associate bill passing Accounts Officer will allot a unique 16 digit permanent pension account number as under:-

1st to 4th digit Calendar year in which the account is opened (To be allotted by Railway)
5th digit Ministry Code as allotted by CGA (Code No. ‘.5’ has been allotted to Railways by CGA).
6th to to 8th digits Zone/Production unit Code (As per FMIS Programme to be allotted by FA&CAOs themselves prefixing ‘0’ to the existing 2 digit railway code e.g. 3-digit numercial code for ECR will be 030)
9th  to 11th digits Associate Accounting Unit Codes to be allotted by FA&CAOs themselves starting from 001.
12th  to 16th digits Employee Number (To be allotted by Associate Accounts Office concerned starting from 00001 running from January to December of a calendar year)

FA&CAO shall be the nodal officer for each Railway/Production Unit and Dy.CAO/General shall be the officer-in-charge at Headquarters Office  responsible for this system to correspond with the office of CPAO. For this purpose particulars of Associate Accounts Officers and FA&CAO may be sent to CPAO in the enclosed format in both soft and hard copy by 05-03-2004 under advice to Board’s Office. The name, postal address, telephone number, FAX number, e-mail address etc. of Dy.CAO/G may also be sent. The name and address of the nodal officers in Central Pension Accounting Office are as under:-

1.         Name               :           Smt.Vadana Sharma

Designation       :           Chief Controller (Pension)

Address:           :           Central Pension Accounting office

Trikoot-II,Bhikaji Cama Place

New Delhi-110066

e-mail               :           cccpao.nic.in

Telephone        :           26169405, 26174864  FAX No.26167326

2..        Name               :           Shri Sunahari Lal

Designation       :           Controller of Accounts

Address:           :           Central Pension Accounting office

Trikoot-II,Bhikaji Cama Place

New Delhi-110066

Telephone        :           26174809

J)       The Associate Accounts Officer will maintain an index register (Annexure-III) for this purpose which shall indicate the name of the Railway servant, date of birth, designation, name of office, scale of pay, pay, nominee for the pension fund and the employee serial number allotted etc.  Necessary entries should be made in this register at the time of allotment of number to the new Railway servant.

k)                  The Associate Accounts Officer shall return to the Drawing officer concerned, a photocopy of the statement duly indicating therein the account numbers allotted to each Railway employee by 10th of each month. The drawing officer shall intimate the account number to the Railway servant concerned and also note the same in the Pay Bill Register.

l)                    The particulars of the Railway servant received from various drawing officers will be consolidated by the Associate Accounts Officer in prescribed format (Annexure-II A) and sent to FA&CAO by the 12th of each month. The FA&CAO shall consolidate the particulars in the prescribed format (Annexure-II B) and forward the same to Central Pension Accounting Office by 15th of the same month for feeding the information in their computer.  The information will also be sent through e-mail.  A copy of this statement may also be endorsed to Board’s Office till further orders.

m)                The Drawing officers shall prepare separate Pay Bill Registers in respect of the Railway servants joining service on or after 1.1.2004.  They shall also prepare separate pay bills in respect of these Railway servants and send the same with all the schedules to the associate bill passing Accounts Officer as per salary bill programme in vogue.

n)                  The Drawing Officers shall prepare a recovery schedule in duplicate in prescribed form (Annexure-IV) for the contributions under tier I and attach them with the pay bills.  The amount of contributions so made should tally with the total amount of recoveries shown under the corresponding columns in the Pay Bill.

  • o)                  (i) These recoveries and interest payable will be classified as credits under the following head of accounts.

Public Account

Sub Sector K – Deposit & Advances Section (a)

Deposit bearing interest

Major Head: 8342-Other Deposits.

Minor Head: 120-Misc. Deposits.

Sub-Head: Defined Contribution Pension System.

Detailed Head:

Employee’s contribution under Tier-1

Government’s Contribution under Tier-1

Interest on contributions under Tier-1

(ii)                The interest payable will be debited to the following head of accounts:-

Major Head 2049                    :           interest Payments.

Sub Major Head 60     :           Interest on other obligations

Sub Head                     :           Interest on New Defined Contribution Pension System

Detailed Head              :           interest on Contribution on tier-1

Object Head                :           Interest

5.               The said amount of interest will be credited to Detailed head-Interest on Contributions under Tier-1 under the existing Major head 8342 mentioned above.  Government has decided to allow interest linked to GPF rate, which is presently 8% p.a., on the above amount. Detailed instructions with regard to interest calculation will follow.

(iii)       The proposal for introduction of the newly proposed accounts heads is presently under consideration of Ministry of Finance and C&AG of India.  Further instructions in this regard will follow shortly after which FA&CAOs may open these new accounting heads in their books of Accounts and FA&CAO/S.C.Railway may ensure issuance of necessary correction slip in the Account Current Programme for this purpose

p)                  It may be noted that alongwith the salary bill for the Railway servants, who join service w.e.f. 1.1.2004, the drawing officer shall also prepare a separate bill for drawal of matching contributions to be paid by the Government and creditable to the pension account.

q)                  The expenditure on matching contribution by Government shall be debited to a new primary unit namely “Matching Contribution of Central Government towards Defined Contribution Pension System” under the service expenditure head concerned.  Necessary ACS in this regard has already been issued vide Board’s letter of even number dated 17.2.04 (copy enclosed).  The amount of Government’s contribution will be transferred to the pension account by debiting to the above head and crediting to the deposit head mentioned in sub-para (o) above, and as such net amount payable will be nil.  The bills for drawal of matching Government’s contribution shall also be supported by the schedules of recoveries in form enclosed as Annexure-V.

r)                   On receipt of salary bills in respect of Railway servants joining service on or after 1.1.2004, the Associate Accounts Office shall exercise usual checks before passing the bill and making payments.  After the payment is made, one set of schedules relating to pension contribution shall be detached from the bill and passed on to the section responsible for posting of credits of contributions in the ledger account of the Railway servant.

s)                   The Employee’s contribution under tier-I & II and the Government’s contribution under tier-I shall be posted in different columns of individual ledger account in the format as at Annexure-VI and the total thereof reconciled with the general books.

t)                    These accounts should not be mixed with SRPF/GPF accounts and should be maintained independent of the PF accounts maintained in case of pre 1.1.2004 entrants.

u)                  (i) The Associate Accounts Office shall consolidate the information available in the New Pension System schedule received from the various drawing officers and forward the same in prescribed form (Annexure-VII to FA&CAO by 12h of the month following the month to which the credit pertains.  The FA&CAOs shall consolidate the information and send the same to the Central Pension Accounting Office by 15th of the month in prescribed format (Annexure-VII A) both in hard and soft form.  However, no accounts will be transferred to CPAO by the Associate Account Officers/FA&CAOs.

(ii)                A copy of the above statement may also be endorsed to Board’s Office till further order.

(iii)               CPAO on receipt of this information will update its database and generate exception reports for missing credits, mismatch etc., which will be sent back to the FA&CAO concerned for further action.

(v)   In case any government servant is transferred from one accounting unit to another, the balances will not be transferred.  However,  the drawing officer shall indicate in the LPC of the individual the unique account number, the month up to which the Railway servant’s contribution and Government’s contribution has been transferred to the pension fund.  It may be noted that the unique Permanent Pension Account Number once allotted shall not be changed.

(w)              No withdrawal of any amount shall be permitted during the interim arrangement.  However in the event of the death of the Railway servant, the accumulations under Tier-I will be paid to his/her spouse/dependents.

(x)                At the end of each financial year, the CPAO will prepare an annual statement showing the details of deductions and contributions made by the Government and also interest, if any, allowed by the Government and forward it through FA&CAO/Associate Accounts office to the Drawing Officers where the Railway servant is presently working, to give the same to him/her.

(y)                After the close of each financial year, CPAO will also report the detail of the balances (Accounting unit wise) to each FA&CAO, who will forward the information to each Accounts Officer for the purpose of reconciliation. The Account Officer shall reconcile the figure of contributions posted in the ledger account of individual railway employee concerned with the figures as per the statement received from CPAO.

(z)                Detailed instructions with regard to transfer of balances will be issued after the appointment of regular CRA and Fund Managers.

Kindly issue suitable guidelines/procedure orders to the concerned staff accordingly and ensure strict compliance of these instructions.  The statements due to be submitted to CPAO during February,04 may be submitted at the earliest while including the same in calender of returns to ensure adherence to the stipulated target dates in future.

_________________________________________________________________________

SUB: INTRODUCTION OF NEW PENSION SYSTEM FOR NEW ENTRANTS TO CENTRAL GOVERNMENT SERVICE, INCLUDING RAILWAY SERVICE.

Railway Board’s letter No. F(E)III/2003/PN1/24 dated 31.12.03 (RBE No.225/03)

A copy of the Gazette Notification No.5/7/2003-ECB&PR dated December, 22,2003 published by the Ministry of Finance, Department of Economic Affairs, introducing a new restructured defined contribution pension system for all new entrants to Central Government service including Railway service, from Ist of January, 2004 along with a copy of the Resolution dt.10th October,2003 constituting the interim Pension Fund Regulatory and Development Authority (PFRDA) is circulated for information and necessary action.  As a result  of this decision, the existing Railway Services (Pension) Rules, 1993 including Commutation of Pension Rules and Extraordinary Pension Rules, and State Railway Provident Fund Rules as contained in Indian Railway Establishment Code Vol.I, (1985 Ed.) 1995 Reprint shall not be applicable to the new recruits entering into Railway service from 1.1.2004.  Necessary amendments to these Rules are being issued separately.

2.         The Zonal Railway administrations, Production Units, Recruiting Authorities, etc. are advised to incorporate these changes, if considered necessary, in their prospectus/application forms/offer of appointments to be issued to the new recruits. The new recruits joining the Railway services from 1.1.2004 on the basis of the offer of appointment already issued shall also be covered by the New Pension System and not by the Railway Services (Pension) Rules 1993 and State Railway Provident Fund Rules.

The modalities for operationalising the New Pension System shall follow.

Ministry of Finance, Deptt.of Economic Affairs, ECB & PR Division’s Notification  F.No 5/7/2003-ECB&PR dated December, 22,2003 [ To be published in the Gazette of India [Extraordinary] Part I Section I]

F.No.5/7/2003-ECB & PR: The Government approved on 23rd August 2003 the proposal to implement the budget announcement of 2003-04 relating to introducing a new restructured defined contribution pension system for new entrants to Central Government  service, except to Armed Forces, in the first stage, replacing the existing system of defined benefit pension system.

(i)                  The system would be mandatory for all new recruits to the central Government service from 1st of January 2004 (except the armed forces in the first stage). The monthly contribution would be 10 percent of the salary and DA to be paid by the employee and matched by the Central Government.  However, there will be no contribution from the Government in respect of individuals who are not Government employees.  The contributions and investment returns would be deposited in a non-withdrawable pension tier-I account.  The existing provisions of defined benefit pension and GPF would not be available to the new recruits in the central Government service.

(ii)                In addition to the above pension account, each individual may also have a voluntary tier-II withdrawable account at his option. This option is given as GPF will be withdrawn for new recruits in Central Government service.  Government will make no contribution into this account.  These assets would be managed through exactly the above procedures.  However, the employee would be free to withdraw part or all of the ‘second tier’ of his money anytime.  This withdrawable account does not constitute pension investment, and would attract no special tax treatment.

(iii)               Individuals can normally exit at or after age 60 years for tier-I of the pension system. At exist the individual would be mandatorily required to invest 40 percent of pension wealth to purchase an annuity (from an IRDA)-regulated life insurance company.   In case of Government employees the annuity should provide for pension for the lifetime of the employee and his dependent parents and his spouse at the time of retirement.  The individual would receive a lump-sum of the remaining pension wealth which he would be free to utilise in any manner. Individuals would have the flexibility to leave the pension system prior to age 60.  However, in this case, the mandatory annuitisation would be 80% of the pension wealth.

Architecture of the New Pension System

(iv)              It will have a central record keeping and accounting (CRA) infrastructure, several pension fund managers (PFMs) to offer three categories of schemes viz. Option A, B and C.

(v)                The participating entities (PFMs and CRA) would give out easily understood information about past performance, so that the individual would able to make informed choices about which scheme to choose.

The effective date for operationalisation of the new pension system shall be from Ist January,2004.

Railway Board’s Notification No. F(E)III/2003/PN1/38 (Amendment)III dated 30.12.03 (RBE No 224/03)

S.O…….(E). – In exercise of the powers conferred by the proviso to article 309 of the Constitution, the President hereby makes the following rules further to amend the Railway Services (Extraordinary Pension) Rules, 1993, namely:-

1.         (1) These rules may be called the Railway Services (Extraordinary Pension) Amendment Rules, 2003.

(2) They shall come into force on the Ist day of January,2004.

2.         In the Railway Services (Extraordinary Pension ) Rules, 1993, in rule 2, for the words “These rules shall apply to all railway servants”, the words, figures and letters “These rules shall apply to railway servants appointed on or before the 31st day of December, 2003” shall be substituted.

                                                       * * *          

ADDITIONAL RELIEF ON DEATH / DISABILITY OF GOVT. SERVANT COVERED UNDER NEW PENSION SCHEME.

RBA No. 18/2010  ( No 2008/AC-II/21/19 dated 13-07-2010 )

( A )   Retirement from Government Service on invalidation not attributable to Government duty:

(a)    Invalid Pension calculated in terms of Rule 38 and Rule 49 of Central Civil Services (Pension) Rules, 1972.

(b)   Retirement gratuity calculated in term of  Rule 50 of Central Civil Services (Pension) Rules, 1972.

(B)       Death in service not attributable to Government duty:

(a)  Family pension (including enhanced family pension ) computed in terms of Rule 54 of Central Civil Services (Pension) Rules, 1972.

(b) death Gratuity computed in terms of Rule 50 of Central Civil Services (Pension) Rules, 1972.

(C)       Discharge from Government service due to disease / injury attributable to

Government duty:

(a)  Disability pension computed in term of  Central Civil Services (Pension) Rules, 1972.

(b) Retirement gratuity calculated in term of  the Central Civil Services (Extra ordinary Pension) Rules read with Rule 50 of the Civil Services (Pension) Rules 1972.

(D)       Death in service attributable to Government duty:

(a) Extra ordinary Family Pension computed in term of  the Central Civil Services (Extra ordinary Pension) Rules and scheme for Liberalised Pension Awards.

(b) death Gratuity computed in terms of Rule 50 of Central Civil Services (Pension) Rules, 1972.

Employees / his family will also be paid Dearness pension /Dearness relief admissible from time to time in addition to the above benefits, on provisional basis.

******************************************************************

About these ads
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 329 other followers

%d bloggers like this: