Payment of Dearness Relief to re-employed pensioners and employed family pensioners

PC - VI - 129 RBE No. 134 / 2009 GOVERNMENT OF INDIA MINISTRY OF RAILWAYS (RAILWAY BOARD) No.F(E)III/2008/PN1/13 New Delhi, Dated 20-07-2009 The General Managers/CAOs, All Indian Railways and Production Units. Subject:- Payment of Dearness Relief to re-employed pensioners and employed family pensioners. *****    A copy of  Department of pension and pensioners' Welfare (DOP&PW)'s O.M. No.  38/88/2008-P&PWA(A) dated 9th July, 2009 on the above subject is  enclosed for information and necessary action. These instructions shall  apply mutatis mutandis on the Railways also. DOP&PW's O.Ms dated  2.7.1999 and DOP&T's OM dated 11.11.2008, referred to in the enclosed  O.M. were circulated / adopted on the Railways vide this office letters  No. F(E)III/99/PN1/21 dated 5.08.1999 and No. PC-VI/2009/I/RSRP/2 dated  30.4.2009.   Please  acknowledge receipt.   (Sunil Bhardwaj) Deputy Director Finance (Estt.)III, Railway Board.

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Pension arrears for pre-2006 PBORs would soon be disbursed.

         The Defence Minister Shri AK Antony has called for early disbursal of revised pension and arrears to Ex-Servicemen. Inaugurating the Controllers’ Conference of the Defence Accounts Department here today, Shri Antony asked the Defence Finance officials to expedite and further streamline the pension system for the Armed Forces personnel.

       “Even now, I am getting a lot of complaints from people that they are not getting pensions… Considering the past, things have improved, but even then complaints are there still… So you must take all steps possible so that they get their dues at the earliest,” Shri Antony said.

       Commending the Defence Accounts Department for facilitating the procurement of weapons and systems, Shri Antony noted that the capital expenditure, utilised last year, has been an all-time record. He called for transparent, timely and judicious use of Defence Expenditure. He said that the Government has tried to infuse more transparency in the huge Defence outlay, which is over Rs. 1.52 lakh crores for the current financial year.

       “Defence expenditure and procurement issues are complex and time-consuming and have a direct bearing on our national security. We have tried to infuse more transparency and efficiency into our procedures and systems. It is my firm belief that expenditure of public money must have an appropriate system of checks and balances”, he said.

        In his address to the gathering, the Minister of State for Defence Dr. MM Pallam Raju said that the Defence Pension Adalats have become an effective mechanism for grievance redressal on the ground. He hoped that the pension arrears for pre-2006 PBORs would soon be disbursed. Dr. Pallam Raju said that the Principal Controller of Defence Accounts (PCDA) would soon roll out the e-ticketing system for air travel. The PCDA Rail Booking System for e-ticketing would be introduced in another 200 Armed Forces units by next month and all units would be covered by the yearend, added Smt Nita Kapoor, Controller General of Defence Accounts (CGDA). The Secretary Defence Finance, Smt Indu Liberhan stressed the need for continuing institutionalized interaction between the Defence Finance and the three Services. The Comptroller and Auditor General of India Shri Vinod Rai said that since Defence Finance relates to a sensitive national security concern, the keyword for its success is the outcome and not simple accounting.


         The Chief of the Army Staff General VK Singh and Scientific Advisor to the Defence Minister Dr. VK Saraswat were among the dignitaries present at the inauguration of the three-day biennial conference.

read more...

Pension arrears for pre-2006 PBORs would soon be disbursed.

         The Defence Minister Shri AK Antony has called for early disbursal of revised pension and arrears to Ex-Servicemen. Inaugurating the Controllers’ Conference of the Defence Accounts Department here today, Shri Antony asked the Defence Finance officials to expedite and further streamline the pension system for the Armed Forces personnel.

       “Even now, I am getting a lot of complaints from people that they are not getting pensions… Considering the past, things have improved, but even then complaints are there still… So you must take all steps possible so that they get their dues at the earliest,” Shri Antony said.

       Commending the Defence Accounts Department for facilitating the procurement of weapons and systems, Shri Antony noted that the capital expenditure, utilised last year, has been an all-time record. He called for transparent, timely and judicious use of Defence Expenditure. He said that the Government has tried to infuse more transparency in the huge Defence outlay, which is over Rs. 1.52 lakh crores for the current financial year.

       “Defence expenditure and procurement issues are complex and time-consuming and have a direct bearing on our national security. We have tried to infuse more transparency and efficiency into our procedures and systems. It is my firm belief that expenditure of public money must have an appropriate system of checks and balances”, he said.

        In his address to the gathering, the Minister of State for Defence Dr. MM Pallam Raju said that the Defence Pension Adalats have become an effective mechanism for grievance redressal on the ground. He hoped that the pension arrears for pre-2006 PBORs would soon be disbursed. Dr. Pallam Raju said that the Principal Controller of Defence Accounts (PCDA) would soon roll out the e-ticketing system for air travel. The PCDA Rail Booking System for e-ticketing would be introduced in another 200 Armed Forces units by next month and all units would be covered by the yearend, added Smt Nita Kapoor, Controller General of Defence Accounts (CGDA). The Secretary Defence Finance, Smt Indu Liberhan stressed the need for continuing institutionalized interaction between the Defence Finance and the three Services. The Comptroller and Auditor General of India Shri Vinod Rai said that since Defence Finance relates to a sensitive national security concern, the keyword for its success is the outcome and not simple accounting.


         The Chief of the Army Staff General VK Singh and Scientific Advisor to the Defence Minister Dr. VK Saraswat were among the dignitaries present at the inauguration of the three-day biennial conference.

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Retired bank employees who want to join a pension scheme will have to refund the entire amount paid by the bank to their provident fund account and the interest accrued thereon, along with their share in the contribution

    Retired bank employees, who had opted for provident fund (PF) and gratuity at the time of retirement instead of a pension, are feeling left out from the benefits of the new wage settlement signed between theIndian Banks Association (IBA) and the United Forum of Bank Unions (UFBU), a body comprising nine bank unions.


    According to the new wage agreement signed on 27 April 2010, about 8 lakh employees from 26 public sector banks (PSBs), 12 private sector and 8 foreign banks will get a salary hike of about 17.5%. The revision will cost banks Rs4,816 crore, including arrears payment from November 2007, which will be given in a lump sum, K Unnikrishnan, deputy chief executive, IBA said.


    A total of 2.7 lakh employees and 60,000 pensioners will be benefited by the second pension option in the agreement. For employees who had not joined the pension scheme in 1995, the new agreement gives them another opportunity to join the scheme. However, there is a catch. They will have to refund the entire amount of the bank's contribution to their PF and interest accrued thereon received on retirement with the employee’s share in the contribution.

   "On an individual basis, this payment over and above the bank's contribution to PF and interest thereon has been worked out at 56% of the said amount of the bank's contribution to the PF and interest thereon received by the employee on retirement," the agreement, a copy of which is with Moneylife, says.


    As a result of the new wage settlement new pension optees will have to pay 2.8 times of their November 2007 revised salary from the earlier agreed 1.6 times. "All unions kept mum on this, which came to light only after signing and yet they say this is historic. 


    C.H .Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) and convener for the UFBU, said, "People had made the mistake of not joining the pension scheme earlier and some of them are still not ready to accept it. What they are not willing to understand is with the pension scheme, they
can receive a regular income more than the interest they may earn. Plus this pension has a provision for dearness allowance to be revised every six months."


    Refunding the entire amount of the bank's contribution to their PF and interest accrued thereon received by the employee on retirement with the share in contribution has not gone down well with some retired bank employees. Whether the employee retired in 1997 or in 2007, there is no differentiation and both have to refund the entire amount of bank’s contribution along with interest. For example, an employee who retired in 1997 might have received Rs6 lakh as terminal dues. If he invests the same amount at an average interest rate of 8%, then he would receive about Rs48,000 per year just as interest. From 1997 to 2010, he most probably would have received more amount as interest than his investment. 


    "This second pension offer is nothing but a cruel joke on retired bank employees. Retired bank employees, especially those above the age of 66, are finding this offer unviable and unfair since they have to pay a heavy sum and chances of recovering the principal amount are less," said a retired bank employee in condition of anonymity.


   When asked to explain the contribution and pension per month, Mr Venkatachalam said that if for example, an employee had received Rs10 lakh as PF and gratuity on retirement, then he will have to refund this Rs10 lakh plus around Rs5.5 lakh as his own contribution. However, the bank will also contribute around the same amount and the actual amount an employee has to refund comes to Rs10 lakh. To add to this, he will receive pension arrears of eight months at a rate of about Rs15,000 per month. If he can use this money for the refund amount, then his actual contribution to the new pension scheme comes to just about Rs8.5 lakh. He will continue to receive Rs15,000 every month thereafter. In addition, after every six months, the dearness allowance component in his pension will increase, so he will receive more money. On
the other hand if he invests Rs8.5 lakh, then he would get an interest of about Rs68,000 for a year or Rs5,700 per month. Now he has to decide whether to opt for Rs15,000 per month or Rs5,700 per month, Mr Venkatachalam said.


    One problem with the pension scheme is that some of the retired employees may not have enough cash left with them since usually people try to buy expensive things such as a home or a four-wheeler from the money earned at retirement. They most likely would find it very difficult to garner the required money so as
to receive monthly pension or regular income.


    Vishwas Utagi, secretary, AIBEA said, “We have been advising employees to keep the funds they received at the time of retirement separate, in case they plan to opt for the new pension scheme. So, I think refunding the bank’s contribution and interest should not be an issue.”


    The UFBU has been asking the IBA to allow another option to for those to join the pension scheme—employees who were in the service of banks prior to 29 September 1995 in case of PSBs, and 26 March 1996 in case of associate banks of the State Bank of India (SBI) and who did not opt for the scheme. IBA, however, was not ready for the same due to cost considerations. The UFBU then offered to
share a portion of the initial funding liability on a one-time basis for extending pension to the non-optees.


    An actuarial valuation of liability by actuaries showed an estimated funding gap of Rs6,000 crore. The UFBU offered to contribute 30% or about Rs1,800 crore to bridge the gap for retired employees. An actuarial valuation on similar lines as conducted for serving employees had estimated the funding gap as
Rs3,115 crore for those retirees or their families.


    “Moreover, as per the new wage agreement, bank employees, both in service and retired, will receive arrears effective from November 2007 and it would help them while contributing to the 30% funding gap,” Mr Utagi said.


    UFBU is receiving calls from children of retired bank employees asking how much their parents will have to pay to get a regular monthly income and these children are ready to pay from their own pockets, 
Mr Venkatachalam added.

SOURCE - MONEY LIFE

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Retired bank employees who want to join a pension scheme will have to refund the entire amount paid by the bank to their provident fund account and the interest accrued thereon, along with their share in the contribution

    Retired bank employees, who had opted for provident fund (PF) and gratuity at the time of retirement instead of a pension, are feeling left out from the benefits of the new wage settlement signed between theIndian Banks Association (IBA) and the United Forum of Bank Unions (UFBU), a body comprising nine bank unions.


    According to the new wage agreement signed on 27 April 2010, about 8 lakh employees from 26 public sector banks (PSBs), 12 private sector and 8 foreign banks will get a salary hike of about 17.5%. The revision will cost banks Rs4,816 crore, including arrears payment from November 2007, which will be given in a lump sum, K Unnikrishnan, deputy chief executive, IBA said.


    A total of 2.7 lakh employees and 60,000 pensioners will be benefited by the second pension option in the agreement. For employees who had not joined the pension scheme in 1995, the new agreement gives them another opportunity to join the scheme. However, there is a catch. They will have to refund the entire amount of the bank's contribution to their PF and interest accrued thereon received on retirement with the employee’s share in the contribution.

   "On an individual basis, this payment over and above the bank's contribution to PF and interest thereon has been worked out at 56% of the said amount of the bank's contribution to the PF and interest thereon received by the employee on retirement," the agreement, a copy of which is with Moneylife, says.


    As a result of the new wage settlement new pension optees will have to pay 2.8 times of their November 2007 revised salary from the earlier agreed 1.6 times. "All unions kept mum on this, which came to light only after signing and yet they say this is historic. 


    C.H .Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) and convener for the UFBU, said, "People had made the mistake of not joining the pension scheme earlier and some of them are still not ready to accept it. What they are not willing to understand is with the pension scheme, they
can receive a regular income more than the interest they may earn. Plus this pension has a provision for dearness allowance to be revised every six months."


    Refunding the entire amount of the bank's contribution to their PF and interest accrued thereon received by the employee on retirement with the share in contribution has not gone down well with some retired bank employees. Whether the employee retired in 1997 or in 2007, there is no differentiation and both have to refund the entire amount of bank’s contribution along with interest. For example, an employee who retired in 1997 might have received Rs6 lakh as terminal dues. If he invests the same amount at an average interest rate of 8%, then he would receive about Rs48,000 per year just as interest. From 1997 to 2010, he most probably would have received more amount as interest than his investment. 


    "This second pension offer is nothing but a cruel joke on retired bank employees. Retired bank employees, especially those above the age of 66, are finding this offer unviable and unfair since they have to pay a heavy sum and chances of recovering the principal amount are less," said a retired bank employee in condition of anonymity.


   When asked to explain the contribution and pension per month, Mr Venkatachalam said that if for example, an employee had received Rs10 lakh as PF and gratuity on retirement, then he will have to refund this Rs10 lakh plus around Rs5.5 lakh as his own contribution. However, the bank will also contribute around the same amount and the actual amount an employee has to refund comes to Rs10 lakh. To add to this, he will receive pension arrears of eight months at a rate of about Rs15,000 per month. If he can use this money for the refund amount, then his actual contribution to the new pension scheme comes to just about Rs8.5 lakh. He will continue to receive Rs15,000 every month thereafter. In addition, after every six months, the dearness allowance component in his pension will increase, so he will receive more money. On
the other hand if he invests Rs8.5 lakh, then he would get an interest of about Rs68,000 for a year or Rs5,700 per month. Now he has to decide whether to opt for Rs15,000 per month or Rs5,700 per month, Mr Venkatachalam said.


    One problem with the pension scheme is that some of the retired employees may not have enough cash left with them since usually people try to buy expensive things such as a home or a four-wheeler from the money earned at retirement. They most likely would find it very difficult to garner the required money so as
to receive monthly pension or regular income.


    Vishwas Utagi, secretary, AIBEA said, “We have been advising employees to keep the funds they received at the time of retirement separate, in case they plan to opt for the new pension scheme. So, I think refunding the bank’s contribution and interest should not be an issue.”


    The UFBU has been asking the IBA to allow another option to for those to join the pension scheme—employees who were in the service of banks prior to 29 September 1995 in case of PSBs, and 26 March 1996 in case of associate banks of the State Bank of India (SBI) and who did not opt for the scheme. IBA, however, was not ready for the same due to cost considerations. The UFBU then offered to
share a portion of the initial funding liability on a one-time basis for extending pension to the non-optees.


    An actuarial valuation of liability by actuaries showed an estimated funding gap of Rs6,000 crore. The UFBU offered to contribute 30% or about Rs1,800 crore to bridge the gap for retired employees. An actuarial valuation on similar lines as conducted for serving employees had estimated the funding gap as
Rs3,115 crore for those retirees or their families.


    “Moreover, as per the new wage agreement, bank employees, both in service and retired, will receive arrears effective from November 2007 and it would help them while contributing to the 30% funding gap,” Mr Utagi said.


    UFBU is receiving calls from children of retired bank employees asking how much their parents will have to pay to get a regular monthly income and these children are ready to pay from their own pockets, 
Mr Venkatachalam added.

SOURCE - MONEY LIFE

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Expedite Pension & Arrears for Ex-servicemen - Defence Minister Shri A.K. Antony to Finance Controllers

   The Defence Minister Shri AK Antony has called for early disbursal of revised pension and arrears to Ex-Servicemen. Inaugurating the Controllers’ Conference of the Defence Accounts Department here today, Shri Antony asked the Defence Finance officials to expedite and further streamline the pension system for the Armed Forces personnel.

     
   “Even now, I am getting a lot of complaints from people that they are not getting pensions… Considering the past, things have improved, but even then complaints are there still… So you must take all steps possible so that they get their dues at the earliest,” Shri Antony said.
    
  Commending the Defence Accounts Department for facilitating the procurement of weapons and systems, Shri Antony noted that the capital expenditure, utilised last year, has been an all-time record. He called for transparent, timely and judicious use of Defence Expenditure. He said that the Government has tried to infuse more transparency in the huge Defence outlay, which is over Rs. 1.52 lakh crores for the current financial year.
    
  “Defence expenditure and procurement issues are complex and time-consuming and have a direct bearing on our national security. We have tried to infuse more transparency and efficiency into our procedures and
systems. It is my firm belief that expenditure of public money must have an appropriate system of checks and balances”, he said.
    
   In his address to the gathering, the Minister of State for Defence Dr. MM Pallam Raju said that the Defence Pension Adalats have become an effective mechanism for grievance redressal on the ground. He hoped that the pension arrears for pre-2006 PBORs would soon be disbursed. Dr. Pallam Raju said that the Principal Controller of Defence Accounts (PCDA) would soon roll out the e-ticketing system for air travel. The PCDA Rail Booking System for e-ticketing would be introduced in another 200 Armed Forces units by next month and all units would be covered by the yearend, added Smt Nita Kapoor, Controller General of Defence Accounts (CGDA). The Secretary Defence Finance, Smt Indu Liberhan stressed the need for continuing institutionalized interaction between the Defence Finance and the three Services. The Comptroller and Auditor General of India Shri Vinod Rai said that since Defence Finance relates to a sensitive national security concern, the keyword for its success is the outcome and not simple accounting.
   
   The Chief of the Army Staff General VK Singh and Scientific Advisor to the Defence Minister Dr. VK Saraswat were among the dignitaries present at the inauguration of the three-day biennial conference.

SOURCE - PIB

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Expedite Pension & Arrears for Ex-servicemen - Defence Minister Shri A.K. Antony to Finance Controllers

   The Defence Minister Shri AK Antony has called for early disbursal of revised pension and arrears to Ex-Servicemen. Inaugurating the Controllers’ Conference of the Defence Accounts Department here today, Shri Antony asked the Defence Finance officials to expedite and further streamline the pension system for the Armed Forces personnel.

     
   “Even now, I am getting a lot of complaints from people that they are not getting pensions… Considering the past, things have improved, but even then complaints are there still… So you must take all steps possible so that they get their dues at the earliest,” Shri Antony said.
    
  Commending the Defence Accounts Department for facilitating the procurement of weapons and systems, Shri Antony noted that the capital expenditure, utilised last year, has been an all-time record. He called for transparent, timely and judicious use of Defence Expenditure. He said that the Government has tried to infuse more transparency in the huge Defence outlay, which is over Rs. 1.52 lakh crores for the current financial year.
    
  “Defence expenditure and procurement issues are complex and time-consuming and have a direct bearing on our national security. We have tried to infuse more transparency and efficiency into our procedures and
systems. It is my firm belief that expenditure of public money must have an appropriate system of checks and balances”, he said.
    
   In his address to the gathering, the Minister of State for Defence Dr. MM Pallam Raju said that the Defence Pension Adalats have become an effective mechanism for grievance redressal on the ground. He hoped that the pension arrears for pre-2006 PBORs would soon be disbursed. Dr. Pallam Raju said that the Principal Controller of Defence Accounts (PCDA) would soon roll out the e-ticketing system for air travel. The PCDA Rail Booking System for e-ticketing would be introduced in another 200 Armed Forces units by next month and all units would be covered by the yearend, added Smt Nita Kapoor, Controller General of Defence Accounts (CGDA). The Secretary Defence Finance, Smt Indu Liberhan stressed the need for continuing institutionalized interaction between the Defence Finance and the three Services. The Comptroller and Auditor General of India Shri Vinod Rai said that since Defence Finance relates to a sensitive national security concern, the keyword for its success is the outcome and not simple accounting.
   
   The Chief of the Army Staff General VK Singh and Scientific Advisor to the Defence Minister Dr. VK Saraswat were among the dignitaries present at the inauguration of the three-day biennial conference.

SOURCE - PIB

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A railway employee dies after completion of a year service – Entitled to receive family pension

   The Central Administrative Tribunal (CAT) has, after 41 years, directed the Northern Railway to pay all arrears to a widow of its employee, who died in an accident, within a month.

   Pinja Ram, who was working as a fireman from 1967 to 1969 with the Railways, died on January 11, 1969. The Railways had, so far, failed to provide her with a family pension and other pensionary benefits. Rampyari, a resident of Kangra district, had approached the tribunal for seeking family pension, DCRG and other retrial benefits permissible under the law.

    The Railways has been asked to grant the family pension under the Rule 75 of the Railway Services (Pension) and Gratuity or any other provision in its rules.

   In its reply, the Northern Railways submitted that Pinja Ram was appointed as a temporary shed cleaner on February 1, 1967. He was also put to officiate as fire man ‘C’ but was neither confirmed as the shed cleaner nor as the fire man ‘C’. It admitted that Pinja died in an accident during the course of his employment and they had paid the terminal dues towards death gratuity to his family. The department also claimed that they had passed PF assets along with Rs 7,000 as compensation in view of the fact that Pinja
had died during the course of employment.

   Regarding the payment of family pension and other retrial benefits, the Railways claimed that according to their contention Rampyari is not entitled to these benefits as her husband did not work with the department for at least 10 years so as to entitle her for granting the family pension.

   The Bench comprising Shyama Dogra and Khushiram observed, “It is a hard case where the value of the Railway servant on his death in harness due to an accident has been fixed and paid to the applicant in terms of petty amount of less then Rs 100 as the death gratuity and Rs 7,000 as death compensation.”

   “It is painful to note that neither in the statement nor through arguments addressed by the counsel for the Northern Railways, this court was apprised  of the fact that there is a provision under the Family Pension Rules of the Railways to grant family pension in such cases. We deprecate such practice adopted by the Railway to withheld vital legal information from the court,” the order read.

   “It is further relevant to say that these schemes or rules are framed for benevolent purposes to give some solace to the dependents of the deceased employee but the Northern Railways authorities have withheld these provisions to thwart the applicant’s claim. In such cases, respondents should have taken steps to provide immediate financial assistance to the applicant as per rule,” it added.

   “To impart justice in a fair manner, we have taken judicial notice of the Rule 75 of the Railway Services (Pension) Rules, 1993, regarding the family pension schemes, under which when a railway employee dies after the completion of a year of continuous service, the family of deceased is entitled to receive the family pension,” the order read.

SOURCE - TRIBUNE INDIA

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A railway employee dies after completion of a year service – Entitled to receive family pension

   The Central Administrative Tribunal (CAT) has, after 41 years, directed the Northern Railway to pay all arrears to a widow of its employee, who died in an accident, within a month.

   Pinja Ram, who was working as a fireman from 1967 to 1969 with the Railways, died on January 11, 1969. The Railways had, so far, failed to provide her with a family pension and other pensionary benefits. Rampyari, a resident of Kangra district, had approached the tribunal for seeking family pension, DCRG and other retrial benefits permissible under the law.

    The Railways has been asked to grant the family pension under the Rule 75 of the Railway Services (Pension) and Gratuity or any other provision in its rules.

   In its reply, the Northern Railways submitted that Pinja Ram was appointed as a temporary shed cleaner on February 1, 1967. He was also put to officiate as fire man ‘C’ but was neither confirmed as the shed cleaner nor as the fire man ‘C’. It admitted that Pinja died in an accident during the course of his employment and they had paid the terminal dues towards death gratuity to his family. The department also claimed that they had passed PF assets along with Rs 7,000 as compensation in view of the fact that Pinja
had died during the course of employment.

   Regarding the payment of family pension and other retrial benefits, the Railways claimed that according to their contention Rampyari is not entitled to these benefits as her husband did not work with the department for at least 10 years so as to entitle her for granting the family pension.

   The Bench comprising Shyama Dogra and Khushiram observed, “It is a hard case where the value of the Railway servant on his death in harness due to an accident has been fixed and paid to the applicant in terms of petty amount of less then Rs 100 as the death gratuity and Rs 7,000 as death compensation.”

   “It is painful to note that neither in the statement nor through arguments addressed by the counsel for the Northern Railways, this court was apprised  of the fact that there is a provision under the Family Pension Rules of the Railways to grant family pension in such cases. We deprecate such practice adopted by the Railway to withheld vital legal information from the court,” the order read.

   “It is further relevant to say that these schemes or rules are framed for benevolent purposes to give some solace to the dependents of the deceased employee but the Northern Railways authorities have withheld these provisions to thwart the applicant’s claim. In such cases, respondents should have taken steps to provide immediate financial assistance to the applicant as per rule,” it added.

   “To impart justice in a fair manner, we have taken judicial notice of the Rule 75 of the Railway Services (Pension) Rules, 1993, regarding the family pension schemes, under which when a railway employee dies after the completion of a year of continuous service, the family of deceased is entitled to receive the family pension,” the order read.

SOURCE - TRIBUNE INDIA

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9TH BIPARTITE SETTLEMENT – IMPLEMENTATION and INCOME TAX EXEMPTION ON CONTRIBUTION TOWARDS PENSION FUND

1.     "The 9^th Bipartite was signed on 27^th April 2010.  There have been a series of meetings and grand gala celebrations all over the country over the success of the bipartite which is one of the major mile stone in our bipartite relations with the Indian Banks association. It is also a historic achievement as far as securing the 2^nd Option on Pension. There have been a number of enquiries as to the
implementation of the settlement and also expectations from the rank and file across the country that they would be able to draw the revised salary from the next month as such. The process of getting the agreement vetted by the Government for the purpose of amendments to our regulation was a long drawn procedure in the earlier days.  However, over a period of time we have been able to reduce the delay and see that the in principle clearance is available for the implementation pending the amendments to the regulation of our service rules. 

  2.       While appreciating the anxiety of the members across the country,  we would only like to assure them that the implementation of the 9^th bipartite is not going to be delayed at all and it will take place within the next few days.   The leadership of the Confederation is in constant  touch with the Indian Banks’ association and our information reveal that the officials of IBA are on their job of obtaining necessary instructions from the Government for the implementation of the salary revision and payment of acturial arrears on adhoc basis at the earliest possible.



3.       The next task would be to commence the process of implementation of
the 2^nd
Option on Pension. Comprehensive instructions are being issued to all the
banks to speed up the process of obtaining the option and giving effect to
the scheme without further delay.



4.       Comrades, we have covered a long distance and it is now only a
matter of few days before the 9th bipartite along with the 2nd Option on
Pension in the Banking Industry is implemented.  Let us look forward to
cherish the historic moment.

With greetings

(G.D.NADAF)
GENERAL SECRETARY "




On account of  IBA agreeing to extend 2^nd Option on Pension to CPF Optees, funding of pension gap by Optees at 2.8 times of revised pay as on 01.11.2007, a question has arisen as regards tax on the amount to be recovered, out of arrears of salary and allowances payable on account of 9^th Bipartite settlement. According to Income tax rules, the gross arrears receivable on account of salary revision is taxable. A portion of arrears is invested in Pension fund towards future liability of Banks who have agreed to extend pension to CPF Optees. Therefore, the contribution has to be treated as investment in Superannuation Schemes and the amount to be exempted from payment of tax.





"No./1452/145/10                              
                    10.05.2010

 

To,

The Chairman,
The Indian Banks’ Association,
World TradeCentre,
MUMBAI – 400 020.

 

Dear Sir,


 
2^ND OPTION ON PENSIONCONTRIBUTION TOWARDS PENSION FUND BY CPF OPTEES

 
  1.       As per pension settlement, the employees and Officers are eligible
to exercise one more option towards the Pension Scheme, in lieu of the
Contributory Provident Fund. The agreement also refers to the funding of the
Pension Fund gap by way of contribution by the employees and Officers who
are in service, out of the arrears payable to them on account of the 9^th
Bipartite settlement; apart from surrendering of Bank’s Contribution of PF
accumulated in their respective accounts.

 

2.          The contributions made by the employees towards the Superannuation Benefits; such as Provident Fund, Pension Fund etc., are eligible for the tax
exemption as per the Income Tax rules and treated as investments in the eligible securities for all practical purposes. Thus, the money, so contributed towards pension fund in Bank is liable to be exempted from the payment of Income tax by the Tax authorities. It is in this background, there is a need to issue proper instructions to all the Banks at the time of sending guidelines for the implementation of the 9^th Bipartite settlement as well as the payment of arrears to cover inter-alia:



a)           The amount contributed from the CPF Optees towards their part of contribution for the Pension Fund in view of the 2^nd Option on Pension extended to them should be treated on par with their contributions towards the superannuation benefits and necessary exemption should be extended at the time of deduction of tax at source.  Thus, the recovery made out of arrears for the purpose of payment towards Pension Fund to the extent of 2.8 times of the revised Pay for the month of Nov.2007 should be treated as investment towards the superannuation benefits and necessary exemption should be allowed for the purpose of calculation of Income tax.  In other words, the payment made towards Pension Fund on account of the 2^nd Option on Pension should not be treated as taxable at the hands of the Officers.

b)            The Bank Managements, while furnishing Form – 16 as well as the statement of arrears paid to the Officers should make necessary entry to this effect to enable the Officers’ concerned to utilize the same at the time of submission of their returns.

c)              In view of the fact that the tax on the income for the year 2007-2008, 2008-2009, 2009-2010 have already been deducted at source, the Officers’ should also become eligible to apportion this amount as investment in the next three
years’ income, since the money contributed is very substantial and they may have already exceeded their entitlement for such investments. 




3.              We therefore, request you to obtain special permission from the CBDT to exempt the entire contribution towards pension fund, from payment of tax. Please therefore look into the matter and take necessary action without further delay.


 

Thanking you,

       Yours faithfully,

                              
        (G.D.NADAF)

GENERAL SECRETARY"

 
Source : AIBOC

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9TH BIPARTITE SETTLEMENT – IMPLEMENTATION and INCOME TAX EXEMPTION ON CONTRIBUTION TOWARDS PENSION FUND

1.     "The 9^th Bipartite was signed on 27^th April 2010.  There have been a series of meetings and grand gala celebrations all over the country over the success of the bipartite which is one of the major mile stone in our bipartite relations with the Indian Banks association. It is also a historic achievement as far as securing the 2^nd Option on Pension. There have been a number of enquiries as to the
implementation of the settlement and also expectations from the rank and file across the country that they would be able to draw the revised salary from the next month as such. The process of getting the agreement vetted by the Government for the purpose of amendments to our regulation was a long drawn procedure in the earlier days.  However, over a period of time we have been able to reduce the delay and see that the in principle clearance is available for the implementation pending the amendments to the regulation of our service rules. 

  2.       While appreciating the anxiety of the members across the country,  we would only like to assure them that the implementation of the 9^th bipartite is not going to be delayed at all and it will take place within the next few days.   The leadership of the Confederation is in constant  touch with the Indian Banks’ association and our information reveal that the officials of IBA are on their job of obtaining necessary instructions from the Government for the implementation of the salary revision and payment of acturial arrears on adhoc basis at the earliest possible.



3.       The next task would be to commence the process of implementation of
the 2^nd
Option on Pension. Comprehensive instructions are being issued to all the
banks to speed up the process of obtaining the option and giving effect to
the scheme without further delay.



4.       Comrades, we have covered a long distance and it is now only a
matter of few days before the 9th bipartite along with the 2nd Option on
Pension in the Banking Industry is implemented.  Let us look forward to
cherish the historic moment.

With greetings

(G.D.NADAF)
GENERAL SECRETARY "




On account of  IBA agreeing to extend 2^nd Option on Pension to CPF Optees, funding of pension gap by Optees at 2.8 times of revised pay as on 01.11.2007, a question has arisen as regards tax on the amount to be recovered, out of arrears of salary and allowances payable on account of 9^th Bipartite settlement. According to Income tax rules, the gross arrears receivable on account of salary revision is taxable. A portion of arrears is invested in Pension fund towards future liability of Banks who have agreed to extend pension to CPF Optees. Therefore, the contribution has to be treated as investment in Superannuation Schemes and the amount to be exempted from payment of tax.





"No./1452/145/10                              
                    10.05.2010

 

To,

The Chairman,
The Indian Banks’ Association,
World TradeCentre,
MUMBAI – 400 020.

 

Dear Sir,


 
2^ND OPTION ON PENSIONCONTRIBUTION TOWARDS PENSION FUND BY CPF OPTEES

 
  1.       As per pension settlement, the employees and Officers are eligible
to exercise one more option towards the Pension Scheme, in lieu of the
Contributory Provident Fund. The agreement also refers to the funding of the
Pension Fund gap by way of contribution by the employees and Officers who
are in service, out of the arrears payable to them on account of the 9^th
Bipartite settlement; apart from surrendering of Bank’s Contribution of PF
accumulated in their respective accounts.

 

2.          The contributions made by the employees towards the Superannuation Benefits; such as Provident Fund, Pension Fund etc., are eligible for the tax
exemption as per the Income Tax rules and treated as investments in the eligible securities for all practical purposes. Thus, the money, so contributed towards pension fund in Bank is liable to be exempted from the payment of Income tax by the Tax authorities. It is in this background, there is a need to issue proper instructions to all the Banks at the time of sending guidelines for the implementation of the 9^th Bipartite settlement as well as the payment of arrears to cover inter-alia:



a)           The amount contributed from the CPF Optees towards their part of contribution for the Pension Fund in view of the 2^nd Option on Pension extended to them should be treated on par with their contributions towards the superannuation benefits and necessary exemption should be extended at the time of deduction of tax at source.  Thus, the recovery made out of arrears for the purpose of payment towards Pension Fund to the extent of 2.8 times of the revised Pay for the month of Nov.2007 should be treated as investment towards the superannuation benefits and necessary exemption should be allowed for the purpose of calculation of Income tax.  In other words, the payment made towards Pension Fund on account of the 2^nd Option on Pension should not be treated as taxable at the hands of the Officers.

b)            The Bank Managements, while furnishing Form – 16 as well as the statement of arrears paid to the Officers should make necessary entry to this effect to enable the Officers’ concerned to utilize the same at the time of submission of their returns.

c)              In view of the fact that the tax on the income for the year 2007-2008, 2008-2009, 2009-2010 have already been deducted at source, the Officers’ should also become eligible to apportion this amount as investment in the next three
years’ income, since the money contributed is very substantial and they may have already exceeded their entitlement for such investments. 




3.              We therefore, request you to obtain special permission from the CBDT to exempt the entire contribution towards pension fund, from payment of tax. Please therefore look into the matter and take necessary action without further delay.


 

Thanking you,

       Yours faithfully,

                              
        (G.D.NADAF)

GENERAL SECRETARY"

 
Source : AIBOC

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Lok Sabha passes bill to hike gratuity ceiling to Rs10 lakh

The bill seeks to amend the Gratuity Act to enhance the amount of gratuity payable to an employee from Rs3.5 lakh to Rs 10 lakh
NEW DELHI: Parliament on Wednesday approved enhancement of the gratuity ceiling for employees from Rs 3.5 lakh to Rs 10 lakh, as also the exemptionthreshold from income tax on it.Rajya Sabha put its stamp of approval on the amendment to the Payment ofGratuity Act of 1972 after Lok Sabha had cleared it on Monday. Labourminister Mallikarjun Kharge, however, rejected suggestions to give aretrospective effect to the measure and improve the formula for calculation of gratuity. "We want to give a lot, but there should be a capacity (of the employer) to pay and it should reach the beneficiaries,'' he said.

SOURCE - TIMES OF INDIA

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Lok Sabha passes bill to hike gratuity ceiling to Rs10 lakh

The bill seeks to amend the Gratuity Act to enhance the amount of gratuity payable to an employee from Rs3.5 lakh to Rs 10 lakh
NEW DELHI: Parliament on Wednesday approved enhancement of the gratuity ceiling for employees from Rs 3.5 lakh to Rs 10 lakh, as also the exemptionthreshold from income tax on it.Rajya Sabha put its stamp of approval on the amendment to the Payment ofGratuity Act of 1972 after Lok Sabha had cleared it on Monday. Labourminister Mallikarjun Kharge, however, rejected suggestions to give aretrospective effect to the measure and improve the formula for calculation of gratuity. "We want to give a lot, but there should be a capacity (of the employer) to pay and it should reach the beneficiaries,'' he said.

SOURCE - TIMES OF INDIA

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CM bound for Delhi today, scheduled to meet PM

 

   Imphal, May 05 2010: With tension running high following the rigid stand adopted by the NSCN (IM) as well as the State Government over the proposed visit of Th Muivah to his birth  place at Somdal, Chief Minister O Ibobi is scheduled to leave for New Delhi tomorrow to discuss the issue with the Prime Minister.
Union Home Minister P Chidambaram and Union Finance Minister Pranab Mukherjee are also expected to attend the meeting, which is scheduled for 9 am tomorrow.The Chief Minister will return tomorrow itself.
The Union Home Ministry has already arranged a special flight for the Chief Minister, which will take off from here at 7 am.With an imminent show down hanging heavy in the air, Chief Minister O Ibobi had a telephonic conversation on the issue with Union Home Minister P Chidambaram today. It was during this conversation that the meeting with the Prime Minister was mooted and fixed for tomorrow.Union Finance Minister Pranab Mukherjee also spoke to the Chief Minister urging him to come to Delhi immediately and work  out a resolution.Talking to The Sangai Express, a reliable source said that the State Government has still not budged an inch from its earlier decision to ban the entry of Th Muivah into Manipur. Towards this end, the State Government has prepared a detailed draft, which clearly mentions that the ban is not against the home coming of Th Muivah, but taking into consideration the ground reality.The draft prepared by the State Government points to fact that the NSCN (IM) has a hand in opposing the upcoming election to the ADCs, the bitter memories of the Naga-Kuki clash in 90s are yet to be forgotten as well as the sensitive issue for the demand of a Greater Lim.All these factors taken together convinced the State Government to ban the entry of The Muivah into Manipur under any circumstances, as this could re-ignite bitter memories.The scheduled meeting with the Prime Minister, Home Minister and Finance Minister, gains significance with either side
sticking to their stand, said the source and added that any developments that arise after the meeting with the Prime Minister will be strictly scrutinised.To discuss the tense situation, the Cabinet met today again
and apart from re-affirming its earlier decision, decided to urge the Union Home Ministry to reconsider its earlier stand to allow Muivah to enter Manipur without consulting the State Government.
The MHA had earlier summoned Ibobi to Delhi, but it was deferred by the Chief Minister on the ground that the situation in Manipur is tense.Speaking to the media this evening, Government spokesperson
and IFCD Minister N Biren said that the Cabinet met twice today, one at 10.30 am and the other at 6 pm, to discuss the present situation.Apart from dwelling at length on the situation arising out of the proposed visit of Th Muivah, the Cabinet also took a number of decisions regarding the implementation of the 6th Pay recommendations for Government employees.The IFCD Minister said that the revised 6th Pay recommendations will be implemented with effect from April 1 .Along with this, there will be an increase of 35 percent of the pay for Dearness Allowance and another increase of 10 percent of the pay for House Rent Allowance.The Special Compensatory Allowance will also be hiked appreciably.The 6th Pay commission recommendations will also be implemented for pensioners, he said and added that the pensions would be
increased with each passing years for all pensioners.

SOURCE - E-PAO

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CM bound for Delhi today, scheduled to meet PM

 

   Imphal, May 05 2010: With tension running high following the rigid stand adopted by the NSCN (IM) as well as the State Government over the proposed visit of Th Muivah to his birth  place at Somdal, Chief Minister O Ibobi is scheduled to leave for New Delhi tomorrow to discuss the issue with the Prime Minister.
Union Home Minister P Chidambaram and Union Finance Minister Pranab Mukherjee are also expected to attend the meeting, which is scheduled for 9 am tomorrow.The Chief Minister will return tomorrow itself.
The Union Home Ministry has already arranged a special flight for the Chief Minister, which will take off from here at 7 am.With an imminent show down hanging heavy in the air, Chief Minister O Ibobi had a telephonic conversation on the issue with Union Home Minister P Chidambaram today. It was during this conversation that the meeting with the Prime Minister was mooted and fixed for tomorrow.Union Finance Minister Pranab Mukherjee also spoke to the Chief Minister urging him to come to Delhi immediately and work  out a resolution.Talking to The Sangai Express, a reliable source said that the State Government has still not budged an inch from its earlier decision to ban the entry of Th Muivah into Manipur. Towards this end, the State Government has prepared a detailed draft, which clearly mentions that the ban is not against the home coming of Th Muivah, but taking into consideration the ground reality.The draft prepared by the State Government points to fact that the NSCN (IM) has a hand in opposing the upcoming election to the ADCs, the bitter memories of the Naga-Kuki clash in 90s are yet to be forgotten as well as the sensitive issue for the demand of a Greater Lim.All these factors taken together convinced the State Government to ban the entry of The Muivah into Manipur under any circumstances, as this could re-ignite bitter memories.The scheduled meeting with the Prime Minister, Home Minister and Finance Minister, gains significance with either side
sticking to their stand, said the source and added that any developments that arise after the meeting with the Prime Minister will be strictly scrutinised.To discuss the tense situation, the Cabinet met today again
and apart from re-affirming its earlier decision, decided to urge the Union Home Ministry to reconsider its earlier stand to allow Muivah to enter Manipur without consulting the State Government.
The MHA had earlier summoned Ibobi to Delhi, but it was deferred by the Chief Minister on the ground that the situation in Manipur is tense.Speaking to the media this evening, Government spokesperson
and IFCD Minister N Biren said that the Cabinet met twice today, one at 10.30 am and the other at 6 pm, to discuss the present situation.Apart from dwelling at length on the situation arising out of the proposed visit of Th Muivah, the Cabinet also took a number of decisions regarding the implementation of the 6th Pay recommendations for Government employees.The IFCD Minister said that the revised 6th Pay recommendations will be implemented with effect from April 1 .Along with this, there will be an increase of 35 percent of the pay for Dearness Allowance and another increase of 10 percent of the pay for House Rent Allowance.The Special Compensatory Allowance will also be hiked appreciably.The 6th Pay commission recommendations will also be implemented for pensioners, he said and added that the pensions would be
increased with each passing years for all pensioners.

SOURCE - E-PAO

read more...

Lalu wants Rs 100,000 pension for MPs

   NEW DELHI: Rashtriya Janata Dal (RJD) leader Lalu Prasad on Thursday demanded that the salary and pension of MPs should be increased to Rs 80,000 and Rs 100,000 per month respectively as
many male MPs “will lose their jobs once the women’s reservation bill is passed”.
   Many MPs from the treasury and opposition benches welcomed the suggestion by thumping on their desks. Lalu Prasad was taking part in a discussion on the Finance Bill in the Lok Sabha.
   According to parliament officials, MPs now draw  a salary of Rs 16,000 and their pension is Rs 8,000. However, a MP draws a considerable amount in the form of allowances.
   Referring to the salary being drawn by the civil services officers after the implementation of Sixth Pay Commission, Lalu Prasad said: “MPs’ salary should be increased to Rs 80,000 and pension to Rs 100,000. I’m making this demand because many MPs will lose their job once the women’s reservation bill is passed.”
   When finance minister Pranab Mukherjee completed his reply, MPs asked about their salary and allowances.
   Mukherjee said there is “an institutional  arrangement” in parliament to look into the matter. He said currently a parliamentary committee of both houses headed by Rajya Sabha MP SS Ahluwalia was examining the matter.

read more...

Lalu wants Rs 100,000 pension for MPs

   NEW DELHI: Rashtriya Janata Dal (RJD) leader Lalu Prasad on Thursday demanded that the salary and pension of MPs should be increased to Rs 80,000 and Rs 100,000 per month respectively as
many male MPs “will lose their jobs once the women’s reservation bill is passed”.
   Many MPs from the treasury and opposition benches welcomed the suggestion by thumping on their desks. Lalu Prasad was taking part in a discussion on the Finance Bill in the Lok Sabha.
   According to parliament officials, MPs now draw  a salary of Rs 16,000 and their pension is Rs 8,000. However, a MP draws a considerable amount in the form of allowances.
   Referring to the salary being drawn by the civil services officers after the implementation of Sixth Pay Commission, Lalu Prasad said: “MPs’ salary should be increased to Rs 80,000 and pension to Rs 100,000. I’m making this demand because many MPs will lose their job once the women’s reservation bill is passed.”
   When finance minister Pranab Mukherjee completed his reply, MPs asked about their salary and allowances.
   Mukherjee said there is “an institutional  arrangement” in parliament to look into the matter. He said currently a parliamentary committee of both houses headed by Rajya Sabha MP SS Ahluwalia was examining the matter.

read more...

Clarification regarding deduction in respect of contribution to pension scheme

   F.No. 275/192/2009-IT (B)
New Delhi
Dated the 9th February, 2010.

Sub: Clarification regarding deduction in respect of contribution to pension scheme under Section 80 CCD – matter reg.

                                                                         ------

 1.   A number of representations have been received regarding deduction under Section
80 CCD for contribution made under pension scheme in the light of Circular No-1
/2010 dated 11th Jan’2010 issued on the subject of Deduction of Tax at Source
etc. It is clarified that in accordance with the provisions of Section 80 CCD,
deduction in respect of contribution made by an individual in the previous year
to his account under a pension scheme notified, is allowed in computation of his
total income –


(a) in the case of an employee, ten per cent of his salary in the previous year; and

(b) in any other case, ten per cent of his gross total income in the previous year.


2.   It is further clarified that where the Central Government or any other
employer makes any contribution to the account of employee for the pension
scheme, the assessee shall also be allowed a deduction in the computation of his
total income of the whole of the amount contributed by the Central Govt. or any
other employer as does not exceed 10% of his salary in the previous year.

3.  Salary for the purpose of above section (80 CCD) includes dearness allowance
if the terms of employment so provide, but excludes all other allowances and
perquisites.

4.  It is further clarified that aggregate limit of deduction under this section
(80 CCD) along with Sections 80 C, 80 CCC shall not in any case exceed Rs. one
lakh.


Yours faithfully,

(Ansuman Pattnaik)
Director (Budget)

SOURCE - CGSN

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Clarification regarding deduction in respect of contribution to pension scheme

   F.No. 275/192/2009-IT (B)
New Delhi
Dated the 9th February, 2010.

Sub: Clarification regarding deduction in respect of contribution to pension scheme under Section 80 CCD – matter reg.

                                                                         ------

 1.   A number of representations have been received regarding deduction under Section
80 CCD for contribution made under pension scheme in the light of Circular No-1
/2010 dated 11th Jan’2010 issued on the subject of Deduction of Tax at Source
etc. It is clarified that in accordance with the provisions of Section 80 CCD,
deduction in respect of contribution made by an individual in the previous year
to his account under a pension scheme notified, is allowed in computation of his
total income –


(a) in the case of an employee, ten per cent of his salary in the previous year; and

(b) in any other case, ten per cent of his gross total income in the previous year.


2.   It is further clarified that where the Central Government or any other
employer makes any contribution to the account of employee for the pension
scheme, the assessee shall also be allowed a deduction in the computation of his
total income of the whole of the amount contributed by the Central Govt. or any
other employer as does not exceed 10% of his salary in the previous year.

3.  Salary for the purpose of above section (80 CCD) includes dearness allowance
if the terms of employment so provide, but excludes all other allowances and
perquisites.

4.  It is further clarified that aggregate limit of deduction under this section
(80 CCD) along with Sections 80 C, 80 CCC shall not in any case exceed Rs. one
lakh.


Yours faithfully,

(Ansuman Pattnaik)
Director (Budget)

SOURCE - CGSN

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More post offices and Banks to offer the New Pension Scheme (NPS)

    vestors will soon have more outlets, including post offices, to invest in the
new pension system (NPS). Unhappy with the existing distributors, the pension
fund regulator has signed up eight more service providers to extend the reach of
the scheme. The scheme was thrown open to all individuals in May last year, but
has so far managed to sign up only about 3,000 subscribers. Pension Fund
Regulatory and Development Authority (PFRDA) sees the distribution or the point
of presence (PoP) as the weak link.

    Department of posts, Bank of India, ICICI Securities, Muthoot Finance, Syndicate
Bank, UTI Technology Services Ltd, Yes Bank and Karur Vysya Bank have now joined
the NPS as PoPs. They are expected to add another 2,000 branches to the
880-branch network, where subscribers can open and operate their NPS "We have
just signed an agreement with these PoPs but they will be operational in another
two to three months," a senior PFRDA official said.

    With IT connectivity a pre-requisite for handling NPS customers, the new points
of presence require some time for identifying branches that can function as
service providers for the scheme. They are also integrating their systems with
that of National Securities Depository Ltd — the record-keeping agency of the
NPS, the official explained.

    The NPS was initially open to central government employees who joined service
after 1 April, 2004. It was subsequently extended to private individuals in May
2009.

The biggest attraction of the scheme is the low fund management fee it charges —
0.009% against nearly 2.25% charged by mutual funds. It charges a fixed annual
account maintenance fee of Rs 350 and an additional Rs 20 per transaction. The
scheme has three plans with different exposure to equities.


    In the first eight months of its operations, the scheme is giving 10-12 %
returns , depending on the plan chosen by the subscriber.

SOURCE - ECONOMIC TIMES

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