Retirement Benefits of Government Employees

Generally, many people wish for government jobs in India, mainly because of the good pay and great retirement benefits. In India, the minimum eligibility period for receiving of pension is 10 years.

Once 10 years of service is completed, the retiring person will be eligible for a superannuation pension as per Pension Laws in India.

Retirement Benefits of Government Employees

There are number of benefits in government jobs and one of the main benefit is retirement benefits. Here are some details about the retirement benefits available for government servants in India:

Family pension

When talking about family pension, the widow is eligible for receiving a pension on the death of her spouse after completing a year of continuous service or even prior to the completion of a year.

This is possible if the government servant had been checked up by the suitable medical authority and declared to be fit for government service. Here is how retirement benefit is calculated:

  • From the 1st of January 2006, this retirement benefit is calculated with reference to the mean of emoluments (i.e.) the mean of the basic pay drawn during the past ten months of service or the past basic pay drawn. Here, any of these options, which is advantageous can be chosen.
  • Whole sum pension with ten or twenty years of eligible service is half of the mean emoluments of the basic pay drawn at the time of retirement whichever is beneficial.
  • Prior to 1st of January 2006, the service period of under 33 years, the level of pension was a relative amount to the actually qualifying service divided into completed half-year sessions. For instance, if the total number of years of service is 30 years and 5 months, which means 61 half-year periods, the following formula is used:
    • R/2X61/66 – Here R is the quantifiable amount for the past 10 months of qualifying service or the past pay drawn as chosen by the individual.

Least pension

At the current circumstances, the least pension amount is Rs. 3500 on a monthly basis. The utmost limit of pension is half of the highest pay in Government jobs in India, which is Rs.45000 per month. The pension amount is payable up to and inclusive of the date of death.

Commutation of pension

In India, a central government servant has the chance to commute a portion of pension, which does not exceed 40% of it. This is applicable with effect from the 1st of January 1996.

When this option is opted for within a year of retirement, no medical checkup is needed. If it is chosen after expiry of a year, it is important to undergo a medical checkup by a specified and competent authority.

Death/retirement gratuity

This is payable to retiring government servants. A least number of 5 years of service and eligibility to get pension/service gratuity is important to get the one-time whole sum benefit.

This amount is calculated at the rate of quarter of the each month’s pay plus DA drawn retirement for every completed six monthly period of qualifying service. When talking about this amount, there is no least limit.

Generally, this amount is calculated as 16 times the basic pay up to a maximum of Rs.10 lakhs.

Death gratuity

This is a single-time whole sum benefit that is receivable by a widower/widow of the nominee of a quasi-permanent or a permanent or a temporary government servant, inclusive of dying in harness and CPF beneficiaries.

There are no rules with respect to a least length of service rendered by the deceased employee. Here is how the retirement gratuity is calculated:

  • For less than one year of service, the gratuity is calculated as 2 times of basic pay
  • Six times of basic pay, if the service is rendered for more than a year, but less than 5 years
  • It will be 12 times a basic pay, if the service is between 5 and 20 years
  • If the service is rendered for more than 20 years, half of the benefits for each 6 months of completed service subject to a maximum of 33 times.
  • With effect from the 1st of January 2006, the utmost death gratuity amount permissible is Rs.10 lakhs.

Service gratuity

If a person has worked for less than 10 years in a central government organization in India, he will be eligible for service gratuity and not pension.

Here, the permitted amount is 15 days basic pay last drawn for every 6-month period completed service. Here, there is no least or most amount on the quantum. This is a single-time whole sum payment and it is given in addition to the retirement gratuity.

In addition to these benefits, a retired central government employee in India will receive other benefits like general provident fund and incentives, contributory provident fund (CPF), leave encashment and Central Government Employees Group Insurance Scheme (CGEGIS).

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