Monday, 30 September 2013

Put pension scheme on track

Earlier this month, and after a wait for nearly 10 years, the Pension Fund Regulatory and Development Authority (PFRDA) bill was finally passed by the two Houses of Parliament, conferring a statutory status to the authority. The New Pension Scheme (NPS), which reflects the government’s effort to find sustainable solutions to the problem of providing adequate post-retirement income, has thus acquired an official regulator.

With the introduction of the NPS the government of India has taken a first step towards instituting pension reforms, moving from a defined benefit pension to a defined contribution-based pension system by making it mandatory for all new recruits (except armed forces) joining service on and after January 1, 2004. The erstwhile defined benefit system that promised a percentage of final salary in post-retirement years has been jettisoned and replaced by a system that cannot offer a similar assurance. Government employees now face an uncertain future where returns on NPS investments will hinge entirely on the vagaries of the market. At the same time they have to face the onslaughts of price inflation that refuses to be tamed.

For long years, the rules governing public service differed greatly from those in the private sector. What set the civil servants apart from others was the nature of their duties: they exercised public authority, with the sacrifices and demands on loyalty which this entailed. In return, the state assumed responsibility for supporting them till the end of their lives. This viewpoint was also confirmed by the judgment of the Supreme Court (Nakara vs the Union of India, 1982) which had ruled that pension is not only compensation for loyal service rendered in the past but also a measure of socio-economic justice that includes social security in old age. Now that the government has lifted its protective arm by introducing a defined contribution pension system, civil services will lose much of their sheen. With life expectancy going up, the post-retirement income for employees has assumed as much criticality for survival as career wages.

Indian Railways employs nearly 1.3 million workers who are engaged in a multitude of activities across the length and breadth of India. More than 97 per cent of them belong to Group C and D categories. They are the relatively lower salaried workers, a good proportion of who are engaged in manual duties in the field, such as the gang men looking after the tracks, artisans in workshops, gatemen manning the level crossings, sanitation staff at the stations, shunting staff in the yards, and many more attending to the upkeep and maintenance of a variety of electrical, mechanical and signaling equipment.

Does the railway administration reasonably expect this large contingent of Group C and D employees to have acquired a fair level of financial literacy that could guide them to the most rational mix of investment in the NPS? Has any effort been made to set up a designated group to raise awareness of pensions among them and improve their level of financial education? There is a real risk that individuals may opt for only that portfolio of assets which has the least volatility, and thus obtain poor consumption in old age. The NPS guidelines also stipulate that in case a subscriber fails to exercise any of the prescribed choices as regards assets allocation, his contributions will be invested in accordance with the ‘Auto Choice’ option that authorises the government to place funds in a pre-defined mix of portfolio. It is equally difficult for unsophisticated participants to make a choice of a funds manager. They might also find themselves at sea when at superannuation they have to select an annuity scheme for annuitising the mandated 40 per cent of the final accumulation. Administrative overheads and multiplicity of fixed charges (registration, contribution upload, account maintenance, transaction costs, etc.) will also adversely affect the amount of pension.

These are serious issues that the railway authorities administering the scheme should try to resolve. Lack of knowledge of the NPS structure and specific data on their own entitlements may result in employees carrying unrealistic expectations of their post-retirement incomes, and may consider themselves short changed when the final amount gets known on retirement. Even today there is a good cause to worry as the NPS funds for government employees have posted losses of 2.45 per cent in the past one year. The SIP (Systematic Investment Plan) returns — calculated on the basis of monthly investments — earned by UTI Retirement Solutions, SBI Pension Fund and LIC Pension Fund — the three nominated Pension Fund Managers (PFMS) — over the last three to five years are reported to have averaged a mere 5.88%, 5.84% and 6.58% respectively, far below the 8.6% offered by the Employees’ Provident Fund (EPF).

A very significant amendment to the PFRDA Bill has been the additional option given to the subscribers for investing in schemes with minimum assured returns. This should be welcome news for those not able to decide on other prescribed options. What this guaranteed rate of return is going to be is yet to be notified by PFRDA, but one can safely assume that this will entail an additional charge by the PFMs for providing the guarantee.

Indian Railways should be able to have its say in the matter and act differently if needed. It should stand behind its men and demand that the guaranteed minimum rate of return should not be less than that applicable for EPF, in the minimum for the staff in lower salary brackets that stand disadvantaged because of lack of familiarity with the functioning of capital markets. This will also be in line with the suggestion made by the Yashwant Sinha-led Standing Committee on Finance. Alternatively, the railways should agree to meet the shortfall between the notified EPF rate and the actual returns earned on the minimum guarantee schemes from its own resources. A sinking fund could be set up for the purpose, taking cognisance of the fact that the outgo from this fund will begin only after more than three decades from now, and the annual contributions needed to be made to the fund are not going to make any serious dent in the ministry’s budget. Such a move will motivate its men to perform better, leading to higher traffic in the long run.
source - new indian express

Sunday, 29 September 2013

Recruitment of persons with disabilities-Medical Examination - regarding.

Saturday, 28 September 2013

Job Highlights new icon (28 September- 04 October 2013)

  1. Union Public Service Commission (UPSC) requires 175 Director, Deputy Director, Master Gazetted, Architect etc. Last Date - 17.10.2013
  2. Staff Selection Commission (SSC) notifies Stenographers (Grade ‘C’ & ‘D’) Examination, 2013. Last Date - 26.10.2013
  3. Bharatiya Reserve Bank Note Mudran Private Limited needs 300 Industrial Workman (Trainee). Last Date - 14.10.2013
  4. Himachal Pradesh Gramin Bank invites applications for the posts of Officer Junior Management & Office Assistant. No. of Vacancies – 75. Last Date -09.10.2013.
  5. Indian Institute of Technology Delhi invites applications for the posts of Junior Technical Superintendent & Junior Superintendent Etc. No. of Vacancies–54. Last Date -15.10.2013.
  6. Maulana Azad Education Foundation, New Delhi needs Assistant, Stenographer Etc. Last Date -10.10.2013.
  7. University of Allahabad needs 7 Internal Audit Officer, Placement Officer Etc. Last Date -19.10.2013.
  8. Bharat Petroleum Corporation Limited requires 10 Craftsman (Mechanical & Instrumentation). Last Date -18.10.2013.
Source..employment news

Lok Sabha Passes Pension Fund Regulatory and Development Authority Bill, 2011 with official amendments; Subscribers Seeking Minimum Assured Returns Allowed to OPT for Investing their Funds in such Scheme Providing Minimum Assured Returns

The Pension Fund Regulatory and Development Authority Bill (PFRDA), 2011 was passed by the Lok Sabha today with official amendments. It was earlier introduced in Lok Sabha on the 24th March, 2011 to provide for a statutory regulatory body the Pension Fund Regulatory and Development Authority (PFRDA) under the provisions of the Bill. The legislation seeks to empower PFRDA to regulate the New Pension System (NPS). 

The PFRDA Bill, 2011 was referred to the Standing Committee on Finance on the 29th March, 2011 for examination and report thereon. The Standing Committee on Finance gave its Report on 30th August, 2011. Some of the key amendments incorporated in the Bill based on the recommendations of the Standing Committee on Finance are as follows: 

a) That the subscriber seeking minimum assured returns shall be allowed to opt for investing his funds in such scheme providing minimum assured returns as may be notified by the Authority; 

b) Withdrawals will be permitted from the individual pension account subject to the conditions, such as, purpose, frequency and limits, as may be specified by the regulations; 

c) The foreign investment in the pension sector at 26% or such percentage as may be approved for the Insurance Sector, whichever is higher; 

d) At least one of the pension fund managers shall be from the public sector; 

e) To establish a vibrant Pension Advisory Committee with representation from all major stakeholders to advise PFRDA on important matters of framing of regulations under the PFRDA Act. 

Beside above, the Bill would make the Pension Fund Regulatory and Development Authority a statutory authority. Presently, it has non-statutory status. The NPS is based on the principle that ‘you save while you earn’ especially for retirement and is mainly for those who have a regular income. 

This Bill would also provide subscribers a wide choice to invest their funds including for assured returns by opting for Government Bonds etc. as well as in other funds depending on their capacity to take risk. 

The NPS has been made mandatory for all the central Government employees (except armed forces) entering service with effect from 1.1.2004. Twenty six (26) States have already notified NPS for their employees. NPS has been launched for all citizens of the country including un-orgnised sector workers, on voluntary basis, with effect from 1st May, 2009. Further, to encourage the people from the un-organised sector to voluntarily save for their retirement, the Government has launched the co-contributory pension scheme titled “Swavalamban Scheme” in the Budget of 2010-11. As on 14th August, 2013, the number of subscribers under NPS is 52.83 Lakh with a corpus of Rs.34, 965 crore. In order to effectively invest and manage huge funds belonging to a large number of subscribers and to ensure the integrity of NPS, creation of a statutory PFRDA with well defined powers, duties and responsibilities is considered absolutely necessary and would benefit all NPS subscribers. 

The PFRDA Bill authorizes the PFRDA to establish a Pension Advisory Committee by notification under Clause 44 of the PFRDA Bill, 2011. The object of the Pension Advisory Committee shall be to advise the Authority on matters relating to the making of the regulations under the PFRDA Act. 

Market based returns and wide coverage based on several investment options in the pension sector will build up the confidence in the subscribers, whereas withdrawals for limited purposes from Tier-I pension account will be an incentive for them to join NPS. 

SOURCE - PIB - Release ID :99122

Finmin Orders - Grant of Non-Productivity Linked Bonus (ad-hoc bonus) to Central Government Employees for the year 2012-13.

No.7/24/2007/E III (A)

Government of India
Ministry of Finance
Department of Expenditure
E III (A) Branch

New Delhi, the 27th September, 2013


Subject : Grant of Non-Productivity Linked Bonus (ad-hoc bonus) to Central Government Employees for the year 2012-13.

The undersigned is directed to convey the sanction of the President to the grant of Non-Productivity Linked Bonus (Ad-hoc Bonus) equivalent to 30 days emoluments for the accounting year 2012-13 to the Central Government employees in Groups 'C’ and 'D’ and all non-gazetted employees in Group 'B' who are not covered by any Productivity Linked Bonus Scheme. The calculation ceiling for payment of ad-hoc Bonus under these orders shall continue to be monthly emoluments of Rs. 3500/-, as hitherto. The payment of ad-hoc Bonus under these orders will also be admissible to the eligible employees of Central Para Military Forces and Armed Forces. The orders will be deemed to be extended to the employees of Union Territory Administration which follow the Central Government pattern of emoluments and are not covered by any other bonus or ex-gratia scheme.

2. The benefit will be admissible subject to the following terms and conditions:

(i) Only those employees who were in service as on 31.3.2013 and have rendered at least six months of continuous service during the year 2012-13 will be eligible for payment under these orders. Pro-rata payment will be admissible to the eligible employees for period of continuous service during the year from six months to a full year, the eligibility period being taken in terms of number of months of service (rounded off to the nearest number of months).

(ii) The quantum of Non-PLB (ad-hoc bonus) will be worked out on the basis of average emoluments/calculation ceiling whichever is lower. To calculate Non-PLB (Ad-hoc bonus) for one day, the average emoluments in a year will be divided by 30.4 (average number of days in a month). This will thereafter be multiplied by the number of days of bonus granted. To illustrate, taking the calculation ceiling of monthly emoluments of Rs, 3500 (where actual average emoluments exceed Rs. 3500), Non-PLB (Ad-hoc Bonus) for thirty days would work out to Rs.3500x30/30.4 = Rs.3453.95 (rounded offto Rs.3454/-).

(iii) The casual labour who have worked in offices following a 6 days week for at least 240 days for each year for 3 years or more(206 days in each year for 3 years or more in the case of offices observIng 5 days week), will be eligible for this Non PLB (Ad-hoc Bonus) Payment. The amount of Non-PLB (ad-hoc bonus) payable will be (Rs.1200x30/30.4 i.e.Rs.1184.21(rounded off to Rs,1184/-). In cases where the actual emoluments fall below Rs.1200/- p.m., the amount will be calculated on actual monthly emoluments.

(iv) All payments under these orders will be rounded off to the nearest rupee.

(v) The clarificatory orders issued vide this Ministry’s OM No.F.14(10)-E. Coord/88 dated 4.10.1988, as amended from time to time, would hold good.

3. The expenditure on this account will be debitable to the respective Heads to which the pay and allowances of these employees are debited.

4. The expenditure incurred on account of Non-PLB (Ad-hoc Bonus) is to be met from within the sanctioned budge provision of concerned Ministries/Departments for the current year.

5. In so far as the persons serving in the Indian Audit and Accounts Department are concerned, these orders are issued in consultation with the Comptroller and Auditor General of India.

(Amar Nath Singh)
Deputy Secretary to the Govt of India

Friday, 27 September 2013

DA hike for public servants in M.P.

The Madhya Pradesh Cabinet on Thursday approved a hike in the Dearness Allowance for all employees of the State government and local bodies.

The DA has been hiked from 80 to 90 per cent of the basic salary. The double digit hike comes less than a week after the Centre announced a 10 per cent hike for its employees. Timed before the model code of conduct for elections comes into force, the DA would be paid retrospectively from July 1.

Source - THE hindu

Re-engagement of retired staff on daily remuneration basis in exigencies of services.


No.E(NG)11/2010/RC-4/6                                                         New Delhi, dated 12.09.2013

The General Manager (P)
All Indian Railways/PUs
Sub: Re-engagement of retired staff on daily remuneration basis in exigencies of services.

Attention is invited to this Ministry’s letter of even number dated 27.9.2012 (RBE No. 109/2012) on the above subject. Keeping in view the acute shortage of staff in various categories of posts and consequent hampering of the Railway’s services, Ministry of Railways (Railway Borad) have decided to extend the said scheme, in exigencies of services, for a further period of one year, i.e., up to 14.09.2014, under the same terms & conditions as mentioned in the letter ibid. While implementing the scheme, General Managers may keep in view the fresh recruitment made in the vacant posts.

This issues with the concurrence of the Finance Directorate of Ministry of Railways (Railway Board).
(Harsha Dass)
Director Estt. (N)II
Railway Board

Wednesday, 25 September 2013

GOOD NEWS : Seventh Pay Commission announces By Government for central employees

NEW DELHI: Ahead of elections, the government on Wednesday announced constitution of the Seventh Pay Commission, which will go into the salaries, allowances and pensions of about 80 lakh of its employees and pensioners.

"Prime Minister Manmohan Singh approved the constitution of the 7th Pay Commission. Its recommendations are likely to be implemented with effect from January 1, 2016", finance minister P Chidambaram said in a statement.

The setting up of the Commission, whose recommendations will benefit about 50 lakh central government employees, including those in defence and railways, and about 30 lakh pensioners, comes ahead of the assembly elections in 5 states in November and the general elections next year.

The government constitutes Pay Commission almost every ten years to revise the pay scales of its employees and often these are adopted by states after some modification.

As the Commission takes about two years to prepare its recommendations, the award of the seventh pay panel is likely to be implemented from January 1, 2016, Chidambaram said.

The Sixth Pay Commission was implemented from January 1, 2006, fifth from January 1, 1996 and fourth from January 1, 1986.

The names of the chairperson and members of the 7th Pay Commission and its terms of reference will be finalized shortly after consultation with major stakeholders, Chidambaram said.

Tuesday, 24 September 2013

Expenditure Management - Economy Measures and Rationalization of Expenditure.

Ministry of Finance
Department of Expenditure

New Delhi, the 18th September, 2013


Sub: Expenditure Management - Economy Measures and Rationalization of Expenditure.

Ministry of Finance, Department of Expenditure has been issuing austerity instructions from time to time with a view to containing non-developmental expenditure and releasing additional resources for priority schemes. The last set of instructions was issued on 31st May 2012,  1st November 2012 and 14th November 2012. Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the Government. In the context of the current fiscal situation, there is a need to continue to rationalize expenditure and optimize available resources. With this objective, the following measures for fiscal prudence and economy will come into immediate effect:

2.1 Cut in Non-Plan expenditure:
For the year 2013-2014, every Ministry/Department shall effect a mandatory 10% cut in non-Plan expenditure excluding interest payment, repayment of debt, Defence capital, salaries, pension and the Finance Commission grants to the States. No re-appropriation of funds to augment the Non-Plan heads of expenditure on which cuts have been imposed, shall be allowed during the current fiscal year.

2.2 Seminars and Conferences:
(i) Utmost economy shall be observed in organizing conferences/Seminars/workshops. Only such conferences, workshops, seminars, etc. which are absolutely essential, should be held wherein also a 10% cut on budgetary allocations shall be effected.

(ii) Holding of exhibitions/seminars/conferences abroad is strongly discouraged except in the case of exhibitions for trade promotion.

(iii) There will be a ban on holding of meetings and conferences at five star hotels.

2.3 Purchase of vehicles:
Purchase of vehicles is banned until further orders, except against condemned vehicles.

2.4 Domestic and Foreign Travel:
(i) All officers are to travel in economy class only for domestic travel, except officers in the Apex Scale who may travel in executive class. Officers may travel by entitled class for international travel, however officers in Apex scale may travel only by business class. In all cases of air travel, only the lowest fare air tickets of the entitled class are to be purchased / procured. No companion free ticket on domestic/international travel is to be availed of. The existing instructions regarding travel on Leave Travel Concession (LTC) would continue.

(ii) It would be the responsibility of the Secretary of each Ministry/Department to ensure that foreign travel is restricted to most necessary and unavoidable official engagements based on functional necessity, and that extant instructions are strictly followed.

(iii) Where travel is unavoidable, it will be ensured that officers of the appropriate level dealing with the subject are sponsored instead of those at higher levels. The size of the delegation and the duration of visit will be kept to the absolute minimum.

(iv) Proposals for participation in study tours, workshops / conferences / seminars / presentation of papers abroad at Government cost will not be entertained except those that are fully funded by sponsoring agencies.

(v) Travel expenditure (including FTE) should be so regulated as to ensure that each Ministry remains within the allocated budget for the same. Re-appropriation proposals on this account would not be approved.

2.5 Creation of Posts:
(i) There will be a total ban on creation of Plan and Non-Plan posts.

(ii) Posts that have remained vacant for more than a year are not to be revived except under very rare and unavoidable circumstances and after seeking clearance of Department of Expenditure.

3. Observance of discipline in fiscal transfers to States, Public Sector Undertakings and Autonomous Bodies at Central/State/Local level:
3.1 Release of Grant-in-aid shall be strictly as per provisions contained in GFRs and in Department of Expenditure’s OM No.7(1)/E.Coord/2012, dated 14.11.2012.

3.2 Ministries/Departments shall not transfer funds under any Plan schemes in relaxation of conditions attached to such transfers (such as matching funding).

3.3 The State Governments are required to furnish monthly returns of Plan expenditure - Central, Centrally Sponsored or State Plan — to respective Ministries/Departments along with a report on amounts outstanding in their Public Account in respect of Central and Centrally Sponsored Schemes. This requirement may be scrupulously enforced.

3.4 The Chief Controller of Accounts must ensure compliance with the above as part of pre-payment scrutiny.

4. Balanced Pace of Expenditure:
4.1 As per extant instructions, not more than one-third (33%) of the Budget Estimates may be spent in the last quarter of the financial year. Besides, the stipulation that during the month of March the expenditure should be limited to 15% of the Budget Estimates is reiterated. It may be emphasized here that the restriction of 33% and 15% expenditure ceiling is to be enforced both scheme-wise as well as for the Demands for Grantas a whole, subject to RE ceilings. Ministries / Departments which arecovered by the Monthly Expenditure Plan (MEP) may ensure that the MEP is followed strictly.

4.2 It is also considered desirable that in the last month of the year payments may be made only for the goods and services actually procured and for reimbursement of expenditure already incurred. Hence, no amount should be released in advance (in the last month) with the exception of the following:

(i) Advance payments to contractors under terms of duly executed contracts so that Government would not renege on its legal or contractual obligations.

(ii) Any loans or advances to Government servants etc. or private individuals as a measure of relief and rehabilitation as per service conditions or on compassionate grounds.

(iii) Any other exceptional case with the approval of the Financial  Advisor. However, a list of such cases may be sent by the FA to the Department of Expenditure by 30th April of the following year for information.

4.3 Rush of expenditure on procurement should be avoided during the last quarter of the fiscal year and in particular the last month of the year so as to ensure that all procedures are complied with and there is no infrastructure or wasteful expenditure. FA’s are advised to specially monitor this aspect during their reviews.

5. No fresh financial commitments should be made on items which are not provided for in the budget approved by Parliament.

6. The instructions would also be applicable to autonomous bodies.

7. Compliance 
Secretaries of the Ministries/Departments being the Chief Accounting Authorities as per Rule 64 of GFR shall be fully charged with the responsibility of ensuring compliance of the measures out lined above. Financial Advisors shall assist the respective Departments in securing compliance with these measures and also submit an overall report to the Minister-in-Charge and to the Ministry of Finance on a quarterly basis regarding various actions taken on these measures/guidelines.

Finance Secretary

Source -

CENTRAL VIGILANCE COMMISSION - Rotation of officials working in sensitive posts

Satarkta Bhawan, G.P.O. Complex,
Block A, INA, New Delhi 110023
Dated 11.9.2013
Circular No. 03/09/13
Subject : Rotation of officials working in sensitive posts – regarding.
Central Vigilance Commission and the Department of Personnel and Training have issued instructions for effecting rotational transfers of officials posted on sensitive posts. As per Commission’s instructions issued vide letter Nos. 98.VGL/60 dated 15.4.1999, 02.11.2001 and 004/VGL/90 dated 01.5.2008 and 04.01.2012 (for public sector banks) on this issue, it was prescribed that Ministries/ Departments/ Organisations and CVOs are to identify the sensitive posts and staff working in these posts and also ensure that they are strictly rotated after every two/three years to avoid developing vested interests.
2. The Commission in the superintendence of vigilance administration over the years has observed that such rotational transfers are not effected in many organisations due to which officials continue to remain the same posts for long periods. Such overstay and continuous posting afford scope for indulging in corrupt activities, developing vested interests etc. which may not be in the interest of the organisation. The Commission would, therefore, emphasis that periodical rotation of officials holding sensitive posts/jobs needs to be ensured. As such, officials should not be retained in the same place/position for long by the Ministries/Departments/PSUs/Banks/Organisations etc.
3. Heads/CVOs of all Departments/Organisations are advised to ensure strict compliance of the Commission’s guidelines and implement the same in letter and spirit. Further, the CVOs should specifically report the action taken indicating the number of officials rotated/transferred in the respective organisations in the Monthly Report of CVOs submitted to the Commission.
Source -

ATTENSION - Submission of Form 14 by the spouse to the pension disbursing bank after the death of the pensioner — instructions

No. 1/27/2011-P&PW (E)
Government of India
Ministry of Personnel, P.G. & Pensions
Department of Pension & Pensioners’ Welfare
3rd  Floor, Lok Nayak Bhawan,
Khan Market, New Delhi
Dated: 20th    September, 2013
Sub: Submission of Form 14 by the spouse to the pension disbursing bank after the death of the pensioner — instructions reg.
The undersigned is directed to draw attention to the requirement of applying for family pension in Form 14 as given in rule 81(2) (A) (ii) of the CCS (Pension) Rules, 1972.
2. This Department has been receiving representations from various quarters to do away with the condition of applying for family pension in Form 14 as it is causing inconvenience to widows, who find it difficult and embarrassing to present themselves before two Gazetted Officers/persons of repute for attestation of Form 14.
3. Before commencement of family pension, personal identification details of the spouse such as specimen signature, personal mark of identification and left hand thumb impression, proof of age/date of birth of spouse and an undertaking from him/her for recovery of excess payment are to be obtained by the bank. Form 14 serves as a standard processing sheet, which defines and delineates the exact
requirement of information to be given to the pension disbursing Bank. It was apprehended that in the absence of this standard, the widows may be asked to submit any relevant or irrelevant information by the bank. This could also lead to delay in commencement of the family pension.
4. The matter has been examined and it has been agreed that in case the pensioner and spouse are holding a joint account, the possibility of claim for family pension from someone else does not arise. Therefore, in such cases, there is no requirement of Form 14. The spouse may inform the Bank of death of the pensioner and request the bank for commencement of family pension, through a simple letter. He/she may enclose a copy of death certificate of pensioner, PPO, proof of his/her own age/date of birth and an undertaking for recovery of excess payment. In other cases, i.e., where the pension is not being credited to the joint bank account of the pensioner and his/her spouse, Form 14 will be continued to be obtained by the banks.
However, the condition of attestation of Form 14 has been done away with and witnessing by two persons has been considered as sufficient.
5. For all future cases, Head of Office will forward to the PAO, along with similar details for the pensioner, the specimen signature, personal mark of identification, left hand thumb impression, the proof of age/date of birth and an undertaking from the spouse regarding recovery of excess payment. After the death of the pensioner, the spouse of the deceased pensioner will be required to provide only death certificate to the paying bank, who will identify the spouse based on the information given in the PPO and its own “Know Your Customer” procedures. Where the pensioner and his/her spouse do not have a joint account, Form 14 will be
required as in para 4 above.
6. This issues with the concurrence of Department of Expenditure, vide their ID No. 601/E.V/2013, dated 13.09.2013.
(D.K. Solanki)
Under Secretary to the Government of India


Friday, 20 September 2013

Govt approves 10 per cent DA hike, to benefit 50 lakh central employees

The increase in DA to 90 per cent would result in additional annual expenditure of Rs 10,879 croreThe increase in DA to 90 per cent would result in additional annual expenditure of Rs 10,879 crore
NEW DELHI: The government today approved a proposal to hike dearness allowance to 90 per cent from existing 80 per cent, a move that would benefit about 50 lakh central government employees and 30 lakh pensioners.

"The Union Cabinet approved the proposal to increase dearness allowance to 90 per cent at its meeting here. The hike would be effective from July 1, this year," a source said.

According to the source, the increase in DA to 90 per cent would result in additional annual expenditure of Rs 10,879 crore. There would be additional burden of Rs 6,297 crore on exchequer during 2013-14 on account of this hike in DA.

This is a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10 per cent to be given with effect from July 1, 2010.

DA was hiked to 80 per cent from 72 per cent in April, 2013, effective from January 1, this year.

As per the practice, the government uses CPI-IW data for past 12 months to arrive at a number for the purpose of any DA hike.

The retail inflation for industrial workers between July, 2012 and June 2013 was used to compute the increase in DA.

Wednesday, 18 September 2013

Cabinet may approve 10% DA hike on Friday


The Union Cabinet could approve a proposal to hike the dearness allowance to 90 per cent from the existing 80 per cent, a move that would benefit about 50 lakh central government employees and 30 lakh pensioners.

“The Union Cabinet will take up for discussion and approval a proposal to increase the dearness allowance to 90 per cent at its meeting scheduled for September 20. The hike would be effective July 1, this year,” a source said.

According to the source, the increase in DA to 90 per cent would result in an additional annual expenditure of Rs 10,879 crore. There would be an additional burden of Rs 6,297 crore on the exchequer during 2013-14 on account of this hike in DA.

There would be a double-digit hike in DA after about three years. It was in September 2010 that the Government had announced 10 per cent hike with effect from July 1, 2010.

DA was hiked to 80 per cent from 72 per cent in April 2013, effective January 1, this year.

As per the practice, the Government uses CPI-IW data for the past 12 months to arrive at a number for the purpose of any DA hike.

The retail inflation for industrial workers between July 2012 and June 2013 was used to compute the increase in DA.

Source - The HINDU

Tuesday, 10 September 2013

New Pension Bill, PFRDA Bill, 2011: Frequently Asked Question (FAQ)

New Pension Bill, PFRDA Bill, 2011: Frequently Asked Question (FAQ)

Frequently asked questions about the new Pension Bill, PFRDA Bill, 2011, are given below.
1. What does the new pension law do?

The PFRDA Bill, 2011, (proposed to be enacted as a law) provides for the establishment of an Authority to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.

An Interim Authority has already been created vide Govt Resolution dated October 10, 2003, and November 14, 2008, and is fully functional. The passage of the bill will confer statutory status to the Interim PFRDA to develop and regulate National Pension System (NPS) earlier known as New Pension Scheme.

2. What is NPS ?

The National Pension System reflects (NPS) Government’s effort to find sustainable solutions to the problem of providing adequate retirement income.

The NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account and also his employer can also co-contribute for the social security/welfare of the individual.

The NPS is designed on Defined contribution basis wherein the subscriber contributes to his account, there is no defined benefit that would be available at the time of exit from the system and the accumulated wealth depends on the contributions made and the income generated from investment of such wealth.

Eventual pension wealth is based on the level of contributions made over the years, the charges (administrative and fund management) deducted from the funds and the returns achieved by the investment fund (pension fund managers) used over a period of time during the accumulation phase in the NPS.

The greater the value of the contributions made, the greater the investments achieved, the longer the term over which the fund accumulates and the lower the charges deducted, the larger would be the eventual benefit of the accumulated pension wealth likely to be.

3. Why should one subscribe to a pension fund?

Pension ensures that a person has steady and adequate financial security during his old age, even after he has retired from employment or his earning capacity has extinguished/decreased.

4. What does the pension bill propose?

The PFRDA shall administer the NPS for subscriber’s interest in accordance with the provisions of the PFRDA Act and the rules and regulations framed thereunder. The Authority has the mandate to regulate all other pension funds (other than the NPS) which are not regulated by any other enactment.

5. Is it compulsory?

The NPS is compulsory in respect of persons appointed to public services in connection with the affairs of the Union, or to All-India Services, on or after 1-1-2004. It is also compulsory in case of employees of Central Autonomous bodies.

The NPS is also applicable in respect of employees of various state governments and its autonomous bodies, who have joined the NPS and in respect of whom, such state governments have extended the NPS based on the notifications issued by such states.

The NPS is voluntarily extended to the citizens of India w.e.f May, 2009, who may choose to be covered under the NPS. The NPS has also been extended to various corporates, who may choose to provide the scheme to their employees on a voluntary basis.

6. When was it first introduced?

The PFRDA Bill 2005 was introduced in Lok Sabha in March, 2005, but could not be considered and passed due to dissolution of 14th Lok Sabha. Earlier, the PFRDA Ordinance 2004 was promulgated on December 29, 2004, which lapsed on April 7, 2005.

7. Can one decide how much on ones savings should go into stocks and how much in debt?

Presently, in respect of government employees, the investment choice in asset class E (Equities), asset Class C (Corporate Debts) and Asset Class G (Government Securities) is in accordance with investment pattern contained in Ministry of Finance notification No. F. No. 5 (88)/2006 –PR.— dated August14, 2008. For others different schemes are applicable based on the choice exercised by the subscriber.

8. If stock prices crash, will pension be affected?

The rate of return and NAV (Net Asset Value) of the subscriber will be susceptible to market risk.

9. Can one choose the stocks in which pension fund will put the money?

Pension Fund Managers based on their expertise will choose the stocks for investing the collective monies of the subscriber (under full disclosure to the NPS Trust). However, individual subscriber will not have the option of choosing a particular stock.

10. Can one withdraw money whenever one wants or only after one retires?

The subscriber can exit from the NPS and withdraw the accumulated pension wealth in the following manner and no other exits or withdrawals are permitted presently:

a. Upon attainment of age of 60 years : At least 40% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance is paid as a lump sum payment to the subscriber.

b. Upon Death (irrespective of cause) : The entire accumulated pension wealth (100%) would be paid to the nominee / legal heir of the subscriber and there would not be any purchase of annuity/monthly pension.

c. Exit from the NPS before attainment of age of 60 years (irrespective of cause): At least 80% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity providing for the monthly pension of the subscriber and the balance is paid as a lump sum payment to the subscriber.

11. Can it help the industry?

The industry can benefit by the availability of long term funds under the NPS, which may be deployed to build infrastructure. The industry can also provide the NPS as an important social security scheme to the employees serving in such industries.

Sunday, 1 September 2013

Government to hike DA by 10%; to benefit 80 lakh employees & pensioners

NEW DELHI: Ahead of festival season, Central Government will this month announce a hike in dearness allowance to 90 per cent from existing 80 per cent, benefiting about 50 lakh central employees and 30 lakh pensioners.

According to official source, dearness allowance hike will be 10 per cent and would be effective from July 1, this year.

The sources further said the exact amount of dearness allowance, as a proportion of basic pay, works out to over 90 per cent after factoring in the revised all India Consumer Price Index for Industrial Workers (CPI-IW) for June.

According to revised data released on August 30, retail inflation for factory workers for June stood at 11.63 per cent, higher than provisional estimate of 11.06 per cent for the month released on July 31.

Sources said that since the revised estimate for the month of June is available, the Finance Ministry would soon prepare a proposal for the purpose for seeking Union Cabinet nod.

They further said the proposal will be moved this month. There would be a double digit hike in DA after about three years. It was last in September, 2010, that the government had announced a hike of 10 per cent to be given with effect from July 1, 2010.

DA was hiked to 80 per cent from 72 per cent in April, 2013, effective from January 1, this year.

As per the practice, the government uses CPI-IW data for past 12 month or a year to arrive at a number for the purpose of any DA hike. Thus, the retail inflation for industrial workers between July, 2012 to June 2013 will be used to take a final decision.

Source..economic times