PENSION

Pension is a steady income given to a person after retirement from the organization.

Types of Pension Cases

(1) (2) (3) Superannuation Family Pension Voluntary Retirement (VR )

Rules
(i) (ii) The qualifying service for evaluation of pension is reduced to 20 years w.e.f. 01.09.2008. Earlier it was 33 years. Pension is evaluated on the basis of the last 10 months average pay or last pay drawn whichever is beneficial to retiring employee For officers / employees retired in between 01.12.2005 to 31.12.2005 (i) Minimum Pension & Minimum Family Pension - Rs 2396 /- per month (ii) Maximum Pension - Rs 24956 /- per month (iii) Maximum Family Pension - Rs 14974 /- per month (b) For officers /employees retired after 01.01.2006 (i) Minimum Pension & Minimum Family Pension - Rs 2972 / - per month (ii) Maximum Pension - Rs 30946 /- per month (iii) Maximum Family Pension - Rs 18568 /- per month

Ceiling
(a)

Terms related to the PENSION Calculation

(i) (ii) (iii) (iv) (v) PENSION DCRG (Death Cum Retirement Gratuity) COMMUTATION RESTORATION of Pension FAMILY PENSION

(i) PENSION
The pension amount is calculated based on the Basic Pay at the time of retirement, Age, Service years, etc. It is calculated as 50% of average emoluments of last 10 months salary drawn. It is calculated on Basic and Dearness Pay only. Formula for Calculation of Pension Amount = 50% of Avg. emoluments (last 10 months) X SMP -------66

(ii) DCRG
This is basically known as Gratuity. Gratuity is the amount given to the employee at the time of retirement. It is calculated on Basic, DP and DA. This amount is limited to maximum Rs.3,50,000 / - only.

Formula for Calculation of DCRG Last Salary Drawn X SMP = ----------------------------------------------4 OR Last Salary Drawn X SMP = -----------------------------------------------2 (in case of Death)

(iii) COMMUTATION
At the time of retirement of the employee, a portion of pension can be withdrawn by the employee. A maximum of 40% of pension amount can be withdrawn at the time of retirement. However, depending on the amount withdrawn proportionate amount will be deducted from the Pension amount till 15 years and employee will get reduced Pension till 15 years.

Formula for calculation of Commutation = Commutation Percent of Full Pension x Age Factor x 12 Formula for calculation of Reduced Pension = (Full Pension Commutation Percent of Full Pension) + DA on Full Pension

(iv)

RESTORATION

The commuted portion of pension shall be restored on expiration of 15 years from the date of retirement. After this period the employee is entitled for full pension.

(v)

FAMILY PENSION

In case of death of retired employee, his/her pension is entitled to his/her family or the nominees fixed by the employee. The wife is entitled till her remarriage or death whichever is earlier. In case of Son/Daughter, children are entitled till an age of 25 years or marriage, whichever is earlier.

HOW TO CALCULATE PENSION Prerequisite Data

S.No. 1 2 3 4 5 6 7 8 9 10 11 Item Name Designation Last Office Date of Birth Date of Appointment (W/c) Date of Appointment (Regular) Date of Retirement BASIC (Current drawn) DPA (Current drawn) DA (Current drawn) Interruption Description Shri Ramji Yadu OA Gr-I EE(City Dn. East),Raipur 03.06.1949 --07.06.1975 30.06.2007 Rs. 12775.00 Rs. 6363.00 Rs. 5536.00 (29%)

Calculation of various values

Average Emoluments From 01 / 09 / 2006 To 30 / 06 / 2007 (Number of Months = 10) Basic Pay = 12725.00 Dearness Pay (50%) = 6363.00 Total Emoluments = 190880.00 Average Emoluments = Rs. 19088.00 SMP (Six Monthly Periods) The total Qualifying Service is converted into SMP. Here, in example Qly Service = Date of Retirement Date of Appointment (as Reg.) YYYY MM DD 2007 6 30 1975 6 24 32 0 6 Therefore, Qly Service = SMP = 32 Years 32 x 2 = 64 SMP = = 59 Years 10.46

Age Factor (mentioned as MF) Age on birthday next to the retirement date Therefore MF corresponding 59yr Total Pay Last Basic Drawn Dearness Pay (50% of Basic) Dearness Allowance (29% of Basic + DP) Total Pay = = = = 12725.00 6363.00 5536.00 24624.00

Calculation of Pension
(i) Pension SMP = [ 50% of Avg. emoluments (last 10 months) X -----66 50 64 = (------- x 19088 x --------) 100 66 =

9255.00 pm w.e.f. 01 / 07 / 2007 (Limited to min. & max. value)

(ii) DCRG (in Lumpsum) = Last Salary Drawn (Total Pay) X SMP -----------------------------------------------------4 24624.00 X 64 ( ---------------------------) 4 393984.00

= = =>

350000.00
(Limited to maximum Rs 3,50,000.00) (Limited to 10 Lakhs as declared on 26 Jan 2009)

(iii) COMMUTATION (in Lumpsum) = = = Commutation Percent of Full Pension x Age Factor x 12 40 % x 9255.00 x 10.46 x 12

464675.00 464675.00

Amount Payable = (iv) REDUCED PENSION = = = =

(Full Pension Commutation Percent of Full Pension) + DA on full Pension (9255 ( 0.4 x 9255)) + ( 0.29 x 9255) (9255.00 3702.00) + 2683.95 = 5553 + 2683.95 8237.00 (Date of restoration as per order.)

Note: The amount DA on Full Pension varies as per the DA fixed from time to time, however only (full pension commutation percent on full pension) is shown in the order. In this case Reduced Pension = Rs 5553 /-

FAMILY PENSION CALCULATION DCRG If employee is dead before attaining his qualifying Service of Retirement, The calculation of DCRG in such case is as follows DCRG = Total Pay X Multiplying Factor Where Multiplying Factor varies as follows Service Life MF 1 to 5 years 5 to 20 years above 20 FAMILY PENSION A) Total Pay = Basic Pay + Dearness Pay B) 30 % of Total Pay = 0.3 X Total Pay C) 2 ( or 1.5) X (B) [1.5 when WCA 1923 applicable ] D) 50 % of Total Pay E) Lowest of ( C ) & ( D ) F) Therefore Family Pension would be (E) till 7 years from the date following the death or 65 yrs age of the employee whichever is earlier. And there after it would be (B) FAMILY PENSION CALCULATION S.No. 1 2 3 4 5 6 Description Total Pay 30% of Total Pay 2 (or 1.5) of B 50 % of A Lowest of C & D Family Pension till 7 years from the date following the death or 65 yrs age of the employee whichever is earlier Calculation Basic Pay + Dearness Pay 0.3 x A (1.5 if WCA 1923 applicable) 0.5 x A ( check which is lowest) = E ( till 29.05.2013) Example 6765 + 3383 = 10148 0.3 x 10148 = 3045 2 x 3045 = 6090 0.5 x 10148 = 5074 5074 5074 6 12 SMP / 2 (in case of death) SMP / 4 (on retirement)

= B (After 29.05.2013

3045

In case of Voluntary Retirement, Weightage is given to the number of service years left. A maximum of 5 years is given as weightage in Qualifying Service.

In case Qualifying service is N years and 3 months then 1 extra SMP is added and if it is N years 9 months then 2 extra SMP are added.