PENSION SCHEMES OF LIC & GIC

L.I.C. OF INDIA (EMPLOYEES) PENSION RULES, 1995

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ANNEXURE - 14

LIFE INSURANCE CORPORATION OF INDIA

(EMPLOYEES) PENSION RULES, 1995

GSR 525(E) – In exercise of the powers conferred by Section 48 of the Life Insurance Corporation Act,1956

(31 of 1956), the Central Government hereby makes the following rules, namely :-

CHAPTER - I

PRELIMINARY

1. Short title and commencement -

(1) These rules may be called the Life Insurance Corporation of India (Employees) Pension Rules,

1995.

(2) Save as otherwise expressly provided in these rules, these rules shall be deemed to have come

into force on the Ist day of November, 1993.

2. Definitions - In these rules, unless the context otherwise requires -

(a) “Act” means the Life Insurance Corporation Act, 1956 (31 of 1956);

(b) “actuary” shall have the meaning assigned to it in clause (1) of Section 2 of the Insurance Act,

1938 (4 of 1938);

(d) “average emoluments” means the average of the pay drawn by an employee during the last ten

months of his service;

(e) “child” means a child of the employee, who, if a son, is under twenty-five years of age and if a

daughter, is unmarried and is under twenty-five years of age and the expression “children” shall

be construed accordingly;

(f) “Competent Authority” means,-

(i) in relation to employees belonging to the cadre of Assistant Administrative Officers and

employees belonging to Class II, Class III and Class IV, the Zonal Manager in-charge of the

Zone of the Corporation; and

(ii) in any other case, the appointing authority specified by Appendix I to these rules;

(g) “contribution” means any sum credited by the Corporation on behalf of an employee to the

Fund, but shall not include any sum credited as interest;

(h) “Corporation” means the Life Insurance Corporation of India established under Section 3 of the

Life Insurance Corporation Act, 1956 (31 of 1956);

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(i) “date of retirement” means the last day of the month in which an employee attains the age of

superannuation or the date on which he is retired by the Corporation or the date on which the

employee voluntarily retires;

(j) “employee” means any person employed in the service of the Corporation on full-time work on

permanent basis and who opts and is governed by these rules but does not include an employee

retired before the commencement of these rules and who is drawing pension from the Pension

Fund of the Oriental Government Security Life Assurance Company Limited in accordance with

sub-regulation(2) of regulation 76 of the Life Insurance Corporation of India (Staff) Regulations,

1960, made under the Act;

* Provided that where the Chairman of the Corporation appointed by the Central Government in

accordance with Section 4 of the Act was immediately preceding such appointment an

Employee of the Corporation, then, subject to the terms of any contract, agreement or letter of

appointment or directions issued by the Central Government, such Chairman for the purposes of

these rules shall also be deemed to be an employee of the Corporation.

(k) “family” in relation to an employee means,-

(i) wife in the case of a male employee or husband in the case of a female employee;

(ii) a judicially separated wife or husband, such separation not being granted on the ground of

adultery and the person surviving was not held guilty of committing adultery;

(iii) son who has not attained the age of twenty-five years and unmarried daughter who has not

attained the age of twenty five years including such son or daughter adopted legally

[......deleted ]*

(l) “financial year” means a year commencing on the first day of April;

(m) “Fund” means the Life Insurance Corporation of India (Employees) Pension Fund constituted

under rule 5;

(n) “notified date” means the date on which these rules are published in the Official Gazette;

+ Provided that the notified date in relation to employees mentioned in proviso to clause (j) shall

mean the date on which these Amendment Rules are published in Official Gazette.

**(o) “pay” includes,-

(i) the basic pay including the stagnation increments if any; and

(ii) all allowances counted for the purpose of making contribution to the Provident Fund and

for the payment of dearness allowance;

and

(iii) fixed personal allowance not exceeding the last increment in the scale of pay; if any,

and

(iv) in a case covered by the proviso to clause (j) or where the salary and other conditions have

been fixed with the approval of the Central Govt., the dearness allowance calculated upto

Index No.1148 in the All India Average Consumer Price Index for Industrial workers in the

series 1960=100 applied on the basic pay drawn by him in the scale of pay notified by the

Central Govt., for the post.

* & [ ]* Notified vide Govt. of India Notification dated 3.7.1996

+ Proviso added vide Govt. Notification dated 3.7.1996

** Clause ‘o’ as amended vide Govt. Notification dated 14.5.1999

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Provided that for the purpose of calculating average emoluments, as defined under sub-clause

(d) of rule 2, in respect of employees whose ten months’ period before retirement falls partly

under pre-revised pay scales and partly under the revised pay scales, the pay for the period for

which they have drawn pay as per pre-revised scales may be updated by including the dearness

allowance actually drawn by them or the dearness allowance upto the AICPI to which the revised

basic pay is pegged, whichever is less.

(p) “pension” includes the basic pension and the additional pension referred to in Chapter VI of

these rules;

(q) “pensioner” means an employee eligible for pension under these rules;

(r) “qualifying service” means the service rendered while on duty or otherwise which shall be taken

into account for the purpose of pension under these rules;

(s) “retirement” means,-

(i) retirement in accordance with the provisions contained in sub-regulation (1) or subregulation

(2) or sub-regulation (3) of regulation 19 of the Life Insurance Corporation of

India (Staff) Regulations, 1960 and rule 14 of the Life Insurance Corporation of India Class

III and Class IV Employees (Revision of Terms and Conditions of Service) Rules, 1985

made under the Act;

(ii) voluntary retirement in accordance with the provisions contained in rule 31 of these rules;

(t) “Service Rules” includes, -

(i) the Life Insurance Corporation of India Class I Officers (Revision of Terms and Conditions

of Service) Rules, 1985;

(ii) the Life Insurance Corporation of India Class III and Class IV Employees (Revision of Terms

and Conditions of Service) Rules, 1985;

(iii) the Life Insurance Corporation of India Development Officers (Revision of Terms and

Conditions of Service) Rules, 1986;

made under Section 48 of the Act;

(u) “Staff Regulations” means the Life Insurance Corporation of India (Staff) Regulations, 1960

made under the Act;

(v) “trust” means the trust of the Life Insurance Corporation of India (Employees) Pension Fund

constituted under sub-rule(1) of rule 5;

(w) “trustee” means the trustee of the Life Insurance Corporation of India (Employees) Pension Fund

constituted under rule 5;

(x) “trustee of the Provident Fund “ means the trustees of the Provident Fund of the Corporation;

(y) all other words and expressions used in these rules but not defined, and defined in the Act or the

Service Rules or the Staff Regulations shall have the same meanings respectively assigned to

them in the Act, the Service Rules or the Staff Regulations, as the case may be.

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CHAPTER II

APPLICATION AND ELIGIBILITY

3. Application - These rules shall apply to employees who,-

(1) (a) were in the service of the Corporation on or after the 1st day of January, 1986 but had

retired before the 1st day of November, 1993; and

(b) exercise an option in writing within one hundred and twenty days from the notified date to

become member of the Fund; and

specified in clause(b), the entire amount of the Corporation’s contribution to the Provident

Fund including interest accrued thereon together with a further simple interest at the rate

of six per cent per annum on the said amount from the date of settlement of the Provident

Fund account till the date of refund of the aforesaid amount to the Corporation; or

(2) (a) have retired on or after the 1st day of November, 1993 but before the notified date; and

(b) exercise an option in writing within one hundred and twenty days from the notified date to

become member of the Fund; and

specified in clause (b), the entire amount of the Corporation’s contribution to the Provident

Fund and interest accrued thereon together with a further simple interest at the rate of

twelve per cent per annum on the said amount from the date of settlement of the

Provident Fund account till the date of refund of the aforesaid amount to the Corporation;

(3) (a) are in the service of the Corporation before the notified date and continue to be in the

service of the Corporation on or after the notified date; and

(b) exercise an option in writing within one hundred and twenty days from the notified date to

become member of the Fund; and

Corporation to their Provident Fund alongwith the interest accrued thereon to the credit of

the Fund constituted for the purpose under rule 5; or

(4) join the service of the Corporation on or after the notified date; and

(5) were in the service of the Corporation during any time on or after the 1st day of November,

1993 and had died after retirement but before the notified date, their family shall be entitled for

the amount of pension payable to them from the ate on which they would have been entitled to

pension under these rules had they been alive till the date on which they died, if the family of the

deceased-

(a) exercise an option in writing within one hundred and twenty days from the notified date to

become member of the Fund; and

(b) refund within sixty days after the expiry of the said period of one hundred and twenty days

specified in clause (a) above, the entire amount of the Corporation’s contribution to the

Provident Fund and interest accrued thereon together with a further simple interest at the

rate of twelve per cent per annum from the date of settlement of the Provident Fund

account till the date of refund of the aforesaid amount to the Corporation ; or

(6) joined the service of the Corporation on or after the 1st day of November, 1993 but who have

died while in the service of the Corporation before the notified date, their family shall be entitled

to the family pension under these rules;

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Provided that the family of such a deceased employee refunds within one hundred and eighty

days from the notified date the entire amount of the Corporation’s contribution to the Provident

Fund, if any, and interest accrued thereon together with further simple interest at the rate of

twelve per cent per annum from the date of settlement of the Provident Fund account till the

date of refund of the aforesaid amount to the Corporation;

Provided further that the family of such a deceased employee shall apply in writing for grant of

family pension; or

(7) were in the service of the Corporation during any time on or after the 1st day of January, 1986

and had died while in service on or before the 31st day of October, 1993 or had retired on or

before the 31st day of October, 1993 but died before the notified date in which case their family

shall be entitled to the family pension under these rules, if the family of the deceased, -

(a) exercises an option in writing within one hundred and twenty days from the notified date to

become member of the Fund; and

(b) refund within sixty days after the expiry of the said period of one hundred and twenty days

specified in clause (a) above, the entire amount of the Corporation’s contribution to the

Provident Fund and interest accrued thereon together with a further simple interest at the

rate of six per cent per annum from the date of settlement of the Provident Fund account

till the date of refund of the aforesaid amount to the Corporation ;or

(8) joined the service of the Corporation on or before the 31st day of October, 1993 and who died

while in service on or after the 1st day of November, 1993, but before the notified date in which

case their families shall be entitled to family pension under these rules if the family of the

deceased employee,

(a) exercises an option in writing within one hundred and twenty days from the notified date to

become a member of the Fund; and

(b) refund within sixty days from the date of expiry of the said period of one hundred and

twenty days specified in clause (a) above, the entire amount of the Corporation’s

contribution to the Provident Fund, including interest accrued thereon, together with a

further simple interest at the rate of twelve per cent per annum from the date of

settlement of the Provident Fund account of the employee till the date of refund of the

aforesaid amount to the Corporation.

*(9) (a) joined the service of the Corporation before the 28th day of June, 1995, and are in its

service on the notified date;

(b) exercise an option in writing within one hundred and twenty days from the date of

publication of this notification to become member of the Fund; and

Corporation to their Provident Fund alongwith the interest accrued thereon to the credit of

the Fund constituted for the purpose under Rule 5.

Note : For the purposes of this rule, other than sub-rule (3), “Notified date” shall mean the

date of publication of the Life Insurance Corporation of India (Employees) Pension

(Amendment) Rules, 1997.

4. Option to subscribe to the Provident Fund -

(1) Notwithstanding anything contained in sub-rule (4) of rule 3, an employee who joins the service

of the Corporation on or after the notified date at the age of thirty-five years or more, may,

within a period of ninety days from the date of his appointment, elect to forego his right to

pension, whereupon these rules shall not apply to him.

(2) The option referred to in sub-rule (1) and in rule 3, once exercised, shall be final.

* Sub-Rule 9 alongwith Note inserted vide Govt. Notification dated 22.4.1997.

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CHAPTER III

THE FUND

5. Constitution of the Fund -

(1) The Corporation shall constitute a Fund to be called the Life Insurance Corporation of India

(Employees) Pension Fund under an irrevocable trust within a period of one hundred and twenty

days from the notified date.

(2) The Fund shall have for its sole purpose the provision of the payment of pension or family

pension in accordance with these rules to the employee or his family.

(3) The Corporation shall be a contributor to the Fund and shall ensure that sufficient sums are

placed in it to enable the trustees to make due payments to beneficiaries under these rules.

6. Liability of the Provident Fund trust - The Provident Fund trust shall, immediately after the

constitution of the Fund, transfer to the Life Insurance Corporation of India (Employees) Pension Fund

the accumulated balance of the contribution of the Corporation to the Provident Fund and interest

accrued thereon upto the date of such transfer in respect of every employee.

7. Composition of the Fund - The Fund shall consist of the following, namely:-

(a) the contribution by the Corporation at the rate of ten per cent. per month of the pay of the

employee;

* Explanation 1 :

For the purpose of this rule “pay” includes -

(i) the basic pay,

(ii) allowances other than dearness allowance which count for the purposes of making

contribution to the Provident Fund and payment of dearness allowance,

(iii) dearness allowance payable on the basic pay and the allowances specified in clause (ii)

above, upto Index Number 1148 in the quarterly average of the All India Consumer Price

Index for Industrial Workers in the series 1960=100; and

(iv) allowances to the extent they count for Provident Fund, house rent allowance, gratuity and

for refixation of salary on promotion:

Provided that the Corporation shall not make any contribution to the account of the

Provident Fund of the employee ;

†Explanation 2 :

On and from the date of publication of Life Insurance Corporation of India (Employees) Pension

(Amendment) Rules, 1997, “pay” includes -

(i) the basic pay,

(ii) allowances other than dearness allowance which count for the purposes of making

contribution to the Provident Fund and also payment of dearness allowance,

(iii) allowances to the extent they count for Contribution to the Provident Fund, house rent

allowance, gratuity and for refixation of salary on promotion:

* Explanation renumbered as Explanation 1 by Notification dated 22.4.1997

† Explanation 2 inserted vide Govt. Notification dated 22.4.1997

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Provided that the Corporation shall not make any contribution to the account of the Provident

Fund of the employee ;

(b) the accumulated contributions of the Corporation to the Provident Fund and interest accrued

thereon upto the date of such transfer in respect of the employees;

employees who had retired before the date of publication of these rules but who opt for pension

in accordance with the provisions contained in these rules;

(d) the investment in annuities or securities purchased out of the moneys of the Fund and interest

thereon;

(e) amount of any capital gains arising from the capital assets of the Fund;

(f) the additional annual contribution made by the Corporation in accordance with the provisions

contained in rule 11 of these rules;

(g) any income from investments of the amounts credited to the Fund;

(h) the amount consisting of contribution of the Corporation along with interest refunded by the

family of the deceased employee.

8. Board of Trustees -

(1) The Board of trustees shall consist of such number of persons not less than three and not more

than nine, as may be determined by the Corporation, to be appointed by the Corporation.

(2) The power to appoint the trustees shall be vested with the Corporation and all such

appointments shall be made in writing.

(3) The Corporation shall nominate one of the trustees to be the Chairman of the Board of trustees.

The Corporation shall also nominate a trustee to be an alternate Chairman who shall act as

Chairman in the absence of the Chairman.

9. Trustees to carry out the directions of the Corporation - The trustees shall comply with all such

directions as may be given by the Corporation for the proper functioning of the Fund.

10. Books of accounts of the Fund -

(1) The accounts of the Fund shall contain the particulars of all financial transactions relating to the

Fund in such form as may be specified by the Corporation.

(2) Within one hundred and eighty days from the closing of each financial year, the trust shall

prepare a financial statement of the trust indicating therein the general account of assets and

liabilities of the trust and forward a copy of the same to the Corporation.

(3) The accounts of the Fund shall be audited in accordance with the provisions of section 25 of the

Act.

11. Actuarial investigation of the Fund - The Corporation shall cause an investigation to be made by

an Actuary into the financial condition of the Fund every financial year, on the 31st day of March, and

make such additional annual contributions to the Fund as may be required to secure payment of the

benefits under these rules:

Provided that the Corporation shall cause an investigation to be made by an Actuary into the financial

condition of the Fund, as on the 31st of day of March immediately following the financial year in which

the Fund is constituted.

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12. Investment of the Fund - All moneys contributed to the Fund or received or accruing by way of

interest or otherwise to the Fund, shall, within a reasonable time from the date of the contribution,

receipt or accrual, as the case may be, be dealt in accordance with rule 85 and clause (ii) of rule 89

of the Income-tax Rules 1962, made under the Income-tax Act, 1961,(43 of 1961) and payable both

in respect of capital and interest in India as applicable in the Fund.

13. Payments out of the Fund - The payment of benefits by the trust shall be administered as follows,

namely:-

(a) the trust shall purchase immediate annuities from the Corporation in respect of each employee

or his family, as the case may be, at the time he or his family becomes eligible for the benefits

under these rules;

(b) the trust shall, subject to the availability of additional sums in the Fund, to be provided by the

Corporation as required under rule 5 (3) purchase additional annuities as and when it becomes

necessary to revise upwards the benefits payable in accordance with these rules;

for any reason whatsoever, credit the benefits received from the Corporation under the annuities

purchased as exceed the benefits payable under these rules, to the Fund.

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CHAPTER - IV

QUALIFYING SERVICE

14. Qualifying Service - Subject to the other conditions contained in these rules, an employee who has

rendered a minimum ten years of service in the Corporation on the date of his retirement shall qualify

for pension.

15. Commencement of qualifying service - Subject to the provisions contained in these rules,

qualifying service of an employee shall commence from the date he takes charge of the post to which

he is first appointed on a regular basis.

16. Counting of service on probation - Service on probation against a post in the Corporation if

followed by confirmation in the same or another post shall qualify.

17. Counting of period spent on leave - All leave during service in the Corporation for which leave

salary is payable shall count as qualifying service:

Provided that extraordinary leave granted on medical certificate or on account of the employees’

inability to join or rejoin duty due to civil commotion, not exceeding twelve months during the entire

service, shall also count as qualifying service.

18. Qualifying service on re-appointment - Where,-

(a) a person is re-employed in accordance with the provisions contained in regulation 12 of the Staff

Regulations: or

(b) an employee being a Development Officer, whose services had been terminated in accordance

with the provisions contained in,-

(i) the notification of the Corporation No. 65(24)-Ins. III/7/74 dated the 21st April, 1976,

relating to Schedule III to the Staff Regulations; or

(ii) the notification of the Government of India, Ministry of Finance (Department of Economic

Affairs) No. G.S.R. 290(E) dated the 8th April, 1976 relating to the Life Insurance

Corporation Development Officers (Alteration of Remuneration and other Terms and

Conditions of Service) Order, 1976 issued under sub-section(2) of Section 11 of the Act; or

(iii) the notification of the Corporation dated the 19th December, 1978 relating to the

Schedule III to the Staff Regulations published in the Gazette of India Extraordinary

Part III - Section 4 on 19th December, 1978; or

(iv) the notification of the Government of India, Ministry of Finance (Department of Economic

Affairs) No. G.S.R. 584(E) dated the 19th December, 1978 relating to the Life Insurance

Corporation Development Officers (Alteration of Remuneration and other Terms and

Conditions of Service) Order, 1978 issued under sub-section(2) of Section 11 of the Act; or

(v) the notification of the Government of India, Ministry of Finance (Department of Economic

Affairs) No. G.S.R. 643(E) dated the 26th June, 1989 relating to the Life Insurance

Corporation of India Development Officers (Revision of Certain Terms and Conditions of

Service) Rules, 1989 issued under sub-section(2) of Section 48 of the Act,

and who is re-appointed in the service of the Corporation, the service of such a person or an

employee prior to his re-employment or re-appointment, as the case may be, shall be counted

in the qualifying service if he has paid to the Corporation at the time of such

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re-employment or re-appointment the aggregate of the Corporation’s contribution due to him in

the Provident Fund and the interest thereon which were paid to him on the determination of his

previous service:

Provided that :

(i) periods of extraordinary leave on loss of pay except as otherwise provided herein;

(ii) periods of unauthorised absence except as provided in rule 28 of these rules;

(iii) the service prior to his re-employment or re-appointment in the case of a person reemployed

or reappointed after he has resigned from the service of the Corporation;

shall not be counted as qualifying service.

19. Broken period of service of less than one year - If the period of service of an employee includes

broken period of service of less than one year, then if such broken period is more than six months it

shall be treated as one year and if such broken period is six months or less it shall be ignored.

20. Counting of period spent on training - Period spent by an employee on training in the

Corporation immediately before his appointment or re-employment or re-appointment shall count as

qualifying service.

21. Counting of past service with the erstwhile Insurer - Period of continuous service of a

“transferred employee” with an insurer shall qualify for pension:

Provided that such “transferred employee” was not eligible for any pension, annuity, gratuity in lieu of

pension or such other superannuation benefit in lieu of pension from the insurer in respect of his

service with such insurer.

22. Period of suspension - Period of suspension of an employee pending enquiry shall count for

qualifying service where, on conclusion of such enquiry, he has been fully exonerated or the

suspension is held to be wholly unjustified and, in other cases, the period of suspension shall not count

as qualifying service unless the competent authority passing the order under regulation 38 of the Staff

Regulations governing such cases expressly declares at the time that it shall count to such extent as

such authority may declare.

23. Forfeiture of service - Resignation or dismissal or removal or termination or compulsory retirement

of an employee from the service of the Corporation shall entail forfeiture of his entire past service and

consequently shall not qualify for pensionary benefits.

24. Period of deputation to foreign service - An employee deputed on foreign service to the United

Nations or any other foreign body or organisation may, at his option,-

(a) pay pension contribution in respect of his foreign service and count such service as qualifying

service under these rules; or

(b) avail of the retirement benefits admissible under the rules of the foreign employer and not count

such service as qualifying service under these rules:

Provided that where an employee opts for clause(b), retirement benefits shall be payable to him in

India in rupees from such date and in such manner as the Corporation may, by order, specify.

25. Military Service - An employee who has rendered military service before appointment or reemployment

or re- appointment in the Corporation shall continue to draw the military pension, if any,

and the military service rendered by the employee shall not count as qualifying service for

pension.

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26. Period of deputation to an organisation in India - Period of deputation of an employee to another

organisation in India will count as qualifying service:

Provided the organisation to which he is deputed or the employee pays the pensionary contributions at

the rates specified in sub-rule (a) of rule 7 of these rules, to the Corporation.

27. Addition to qualifying service in special circumstances - An employee shall be eligible to add

to his service qualifying for superannuation pension (but not for any other class of pension) the actual

period not exceeding one-fourth of the length of his service or the actual period by which his age at

the time of recruitment exceeded twenty-eight years, or a period of five years, whichever is less, if the

service or post to which the employee is appointed is one -

(a) for which post-graduate research, or specialist qualification or experience in scientific,

technological or professional fields is essential;

and

(b) to which candidates of more than twenty-eight years of age are normally recruited; and

by the Corporation on account of his possessing higher qualifications or experience:

Provided that this concession shall not be admissible to an employee unless his actual qualifying service

at the time he quits the service in the Corporation is not less than ten years:

Provided further that this concession shall be admissible only if the recruitment rules in respect of the

said service or post contain a specific provision that the service or post is one which carries the benefit

of this rule.

28. Condonation of interruption in service -

(1) In the absence of a specific indication to the contrary in the service records, an interruption

between two spells of service in the Corporation rendered by an employee including service

counted in terms of the various provisions contained in these rules shall be treated as

automatically condoned and the pre-interruption service treated as qualifying service.

(2) Nothing in sub-rule(1) shall apply to an interruption caused by resignation or dismissal or removal

or compulsory retirement or termination from service.

(3) The period of interruption referred to in sub- rule(2) shall not count as qualifying service.

29. Counting of service rendered on permanent part-time basis in certain cases -

(1) In the case of an employee who immediately prior to his appointment on a whole-time basis, was

employed on a permanent part-time basis in the service of the Corporation and was contributing

to the Provident Fund, such service rendered by him on a permanent part- time basis shall be

counted as qualifying service;

(2) The length of qualifying service of the employee referred to in sub-rule(1) for the purpose of

calculating the amount of pension shall be determined in accordance with Appendix II.

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CHAPTER V

CLASSES OF PENSION

30. Superannuation Pension - Superannuation pension shall be granted to an employee who has retired

on his attaining the age specified in rule 14 of the Service Rules or sub-regulation (1) or subregulation(

2) of regulation 19 of the Staff Regulations.

31. Pension on voluntary retirement -

(1) At any time after an employee has completed twenty years of qualifying service he may,by

giving notice of not less than ninety days, in writing, to the appointing authority, retire from

service:

Provided that this sub-rule shall not apply to an employee who is on deputation unless after

having been transferred or having returned to India he has resumed charge of the post in India

and has served for a period of not less than one year:

Provided further that this sub-rule shall not apply to an employee who seeks retirement from

service for being absorbed permanently in an autonomous body or a public sector undertaking to

which he is on deputation at the time of seeking voluntary retirement.

(2) The notice of voluntary retirement given under sub-rule (1) shall require acceptance by the

appointing authority:

Provided that where the appointing authority does not refuse to grant the permission for

retirement before the expiry of the period specified in the said notice, the retirement shall

become effective from the date of expiry of the said period.

(3) (a) An employee referred to in sub-rule (1) may make a request in writing to the appointing

authority to accept notice of voluntary retirement of less than ninety days giving reasons

therefor;

(b) on receipt of a request under clause(a), the appointing authority may, subject to the

provisions of sub-rule (2), consider such request for the curtailment of the period of notice

of ninety days on merits and if it is satisfied that the curtailment of the period of notice will

not cause any administrative inconvenience, the appointing authority may relax the

requirement of notice of ninety days on the condition that the employee shall not apply for

commutation of a part of his pension before the expiry of the notice of ninety days.

(4) An employee, who has elected to retire under this rule and has given necessary notice to that

effect to the appointing authority, shall be precluded from withdrawing his notice except with the

specific approval of such authority:

Provided that the request for such withdrawal shall be made before the intended date of his

retirement.

(5) The qualifying service of an employee retiring voluntarily under this rule shall be increased by a

period not exceeding five years, subject to the condition that the total qualifying service rendered

by such employee shall not in any case exceed thirty-three years and it does not take him

beyond the date of retirement.

(6) The pension of an employee retiring under this rule shall be based on the average emoluments

as defined under clause(d) of rule 2 of these rules and the increase, not exceeding five years in

his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of

calculating his pension.

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32. Invalid Pension -

(1) Invalid pension may be granted to an employee who,-

(a) has rendered minimum ten years of service; and

(b) retires from the service on account of any bodily or mental infirmity which permanently

incapacitates him for the service.

(2) An employee applying for invalid pension shall submit a medical certificate of incapacity from a

medical officer approved by the Corporation.

33. Compassionate Allowance -

(1) An employee, who is dismissed or removed or compulsorily retired or terminated from service,

shall forfeit his pension :

Provided that the authority competent to dismiss or remove or compulsorily retire or terminate

him from service may, if-

(i) such dismissal, removal, compulsory retirement or termination is on or after the 1st day of

November, 1993; and

(ii) the case is deserving of special consideration,

sanction a compassionate allowance not exceeding two-thirds of the pension which would have

been admissible to him on the basis of the qualifying service rendered upto the date of his

dismissal, removal, compulsory retirement or termination.

(2) The compassionate allowance sanctioned under the proviso to sub-rule (1) shall not be less than

the amount of the minimum pension payable under rule 36 of these rules.

34. Payment of pension or family pension in respect of employees who retired or died between

1.1.1986 and 31.10.1993 -

(1) Employees who have retired from the service of the Corporation between the 1st day of

January, 1986 and the 31st day of October, 1993 shall be eligible for pension with effect from

the 1st day of November, 1993.

(2) The family of a deceased employee governed by the provisions contained in sub-rule (7) of rule

3 shall be eligible for family pension with effect from the Ist day of November, 1993.

212

CHAPTER VI

RATE OF PENSION

35. Amount of Pension -

(1) In respect of employees who retired between the 1st day of January, 1986 but before the 31st

day of July, 1987, basic pension and additional pension will be updated as per the formula given

in Appendix-III.

(2) In the case of an employee retiring in accordance with the provisions of the Service Rules or of

the Staff Regulations after completing a qualifying service of not less than thirty three years the

amount of basic pension shall be calculated at fifty per cent. of the average emoluments.

(3) (a) Additional pension shall be fifty per cent. of the allowances drawn by an employee during

the last ten months of his service;

(b) no dearness relief shall be paid on the amount of additional pension.

Explanation : For the purpose of this sub-rule “allowances” means allowances which are

admissible to the extent counted for the following purposes only, namely:-

(i) making contributions to the Provident Fund;

(ii) grant of house rent allowance;

(iii) payment of gratuity; and

(iv) re-fixation of salary on promotion.

(4) Pension as computed being the aggregate of sub-rules (2) and (3) above shall be subject to the

minimum pension as specified in these rules.

(5) An employee who has commuted the admissible portion of his pension as per the provisions of

rule 41 of these rules shall receive only the balance of pension, monthly.

(6) (a) In the case of an employee retiring before completing a qualifying service of thirty-three

years, but after completing a qualifying service of ten years, the mount of pension shall be

proportionate to the amount of pension admissible under sub-rules (2) and (3) and in no

case the amount of pension shall be less than the amount of minimum pension specified in

these rules.

(b) Notwithstanding anything contained in these rules, the amount of invalid pension shall not

be less than the ordinary rate of family pension which would have been payable to his

family in the event of his death while in service.

(7) The amount of pension finally determined under this rule shall be expressed in whole rupee and

where the pension contains a fraction of a rupee, it shall be rounded off to the next higher

rupee.

*(8) Notwithstanding anything contained in these rules, in relation to an employee covered by the

proviso to clause (j) of rule 2 or an employee appointed as a Managing Director under Section

20 of the Act, Pension shall be calculated in accordance with the provisions of sub-rule(2). The

amount of Pension so calculated shall not be less than what he would have been entitled to, had

he continued in the grade of Zonal Manager (Selection Scale), when the Pension becomes due

and payable to him.

* Sub-Rule (8) added vide Govt.Notification dated 22.4.1997

213

36. **Minimum pension - The amount of minimum pension shall be,-

(a) rupees three hundred and seventy five per month in respect of an employee, belonging to Class-

III or Class-IV, who had retired or died before 1st August,1992 and in respect of employee

belonging to Class-I or Class-II, who had retired or died before 1st day of April, 1993.

(b) rupees seven hundred and twenty per month in respect of an employee belonging to Class-III or

Class-IV, who had retired or died on or after 1st August, 1992, and in respect of an employee

belonging to Class-I or Class-II, who had retired or died on or after 1st April, 1993.

***(c) rupees 1,100/- per month in respect of employees belonging to Class-I, Class-II, Class-III and

Class-IV, who have retired or died on or after the first day of August, 1997;

***(d) in case of any wage revision in future the amount of minimum pension payable to an employee

shall be determined by the Corporation corresponding to the index to which the scale is linked.

(The Corporation has determined that the amount of minimum pension shall be rupees 1480/-

per month in respect of employees belonging to Class-I, Class-II, Class-III and Class-IV, who have

retired or died on or after the first day of August, 2002);

37. Dearness Relief -

(1) Dearness relief shall be granted on basic pension or family pension or invalid pension or on

compassionate allowance in accordance with the rates specified in appendix IV.

(2) Dearness relief shall be allowed on full basic pension even after commutation.

38. Determination of the period of ten months for average emoluments -

(1) The period of the preceding ten months for the purpose of average emoluments shall be

reckoned from the date of retirement.

(2) In the case of voluntary retirement the period of the preceding ten months for the purpose of

average emoluments shall be reckoned from the date on which the employee voluntarily retires.

(3) In the case of dismissal or removal or compulsory retirement or termination of service the period

of the preceding ten months for the purpose of average emoluments shall be reckoned from the

date on which the employee is dismissed or removed or compulsorily retired or terminated by

the Corporation.

(4) If during the last ten months of the service an employee had been absent from duty on

extraordinary leave on loss of pay or had been under suspension and the period whereof does

not count as service, the aforesaid period of extraordinary leave or suspension shall not be taken

into account in the calculation of the average emoluments and an equal period before the ten

months shall be included.

** Rule 36 was amended vide Govt. Notification No. GSR 349(E), Part-II, Section 3, Sub-section (i) dated 14.5.1999.

*** Notified in Gazette of India, Part-III Section 3 dated 22.6.2000 (GSR No. 553(E)).

214

CHAPTER VII

FAMILY PENSION

39. Family Pension

(1) Without prejudice to the provisions contained in these rules where an employee dies -

(a) after completion of one year of continuous service; or

(b) before completion of one year of continuous service, provided the deceased employee

concerned immediately prior to his appointment to the service or post was examined by a

medical officer approved by the Corporation and declared fit for employment in the

Corporation; or

compassionate allowance;

the family of the deceased shall be entitled to family pension, the amount of which shall be

determined in accordance with Appendix V.

(2) The amount of family pension shall be fixed at monthly rates and be expressed in whole rupees

and where the family pension contains a fraction of a rupee, it shall be rounded off to the next

higher rupee:

Provided that in no case a family pension in excess of the maximum prescribed under these

rules shall be allowed.

(3) (a) (i) Where an employee, who is not governed by the Workmen’s Compensation Act,

1923 (8 of 1923), dies while in service after having rendered not less than seven

years’ continuous service, the rate of family pension payable to the family shall be

equal to fifty per cent of the pay last drawn or twice the family pension admissible

under sub-rule(1), whichever is less, and the amount so admissible shall be payable

from the date following the date of death of the employee for a period of seven years

or for a period up to the date on which the deceased employee would have attained

the age of sixty five years had he survived, whichever is less;

(ii) in the event of death of an employee after retirement, the family pension as

determined under clause (a) or clause (b) of this sub-rule shall be payable for a period

of seven years or for a period up to the date on which the retired deceased

employee would have attained the age of sixty five years had he survived, whichever

is less;

(b) (i) where an employee, who is governed by the Workmen’s Compensation Act, 1923 (8

of 1923), dies while in service after having rendered not less than seven years’

continuous service, the rate of family pension payable to the family shall be equal to

fifty per cent of the pay last drawn or one and half times the family pension

admissible under sub-rule (1), whichever is less;

(ii) the family pension so determined under sub- clause (i)shall be payable for the period

mentioned in clause(a);

pension under that clause or clause (b) shall be entitled to family pension at the rate

admissible under sub-rule (1).

4) Notwithstanding anything contained in these rules where the family of a deceased employee opts

for pension in accordance with sub-rule (5) of rule 3 or is governed by the provisions contained

in sub-rules (6) or (7) or (8) of rule 3 ,such family of the deceased shall be eligible for family

pension under these rules.

215

40. Period of payment of family pension -

(1) The period for which family pension is payable shall be,-

(a) in the case of a widow or a widower, upto the date of death or re-marriage, whichever is

earlier;

(b) in the case of a son, until he attains the age of twenty-five years; and

she gets married, whichever is earlier:

Provided that if the son or daughter of an employee is suffering from any disorder or

disability of mind or is physically crippled or disabled so as to render him or her unable to

earn a living even after attaining the age of twenty- five years, the family pension shall be

payable to such son or daughter for life subject to the following conditions, namely:-

(i) if such son or daughter is one among two or more children of the employee, the

family pension shall be initially payable to the minor children in the order set out in

clause (e) of sub-rule(1) until the last minor child attains the age of twenty-five and

thereafter the family pension shall be resumed in favour of the son or daughter

suffering from disorder or disability of mind or who is physically crippled or disabled

and shall be payable to him or her for life;

(ii) if there are more than one such children suffering from disorder or disability of mind

or who are physically crippled or disabled, the family pension shall be paid in the

order of their birth and the younger of them will get the family pension only after the

elder next above him or her ceases to be eligible:

Provided that where the family pension is payable to such twin children it shall be

paid in the manner set out in clause (f) of sub-rule (1);

(iii) the family pension shall be paid to such son or daughter through the guardian as if he

or she were a minor except in the case of a physically crippled son or daughter who

has attained the age of majority;

(iv) before allowing the family pension for life to any such son or daughter, the

Competent Authority shall satisfy that the handicap is of such a nature as to prevent

him or her from earning his or her livelihood and the same shall be evidenced by a

certificate obtained from a medical officer approved by the Corporation, setting out,

as far as possible, the exact mental or physical condition of the child;

(v) the person receiving the family pension as guardian of such son or daughter or such

son or daughter not receiving the family pension through a guardian shall produce

every three years a certificate from a medical officer approved by the Corporation to

the effect that he or she continues to suffer from disorder or disability of mind or

continues to be physically crippled or disabled.

Explanation. The grant of family pension to disabled children beyond the age limit

specified in this sub-rule is subject to the following conditions, namely:-

(i) a daughter shall become ineligible for family pension under this sub-rule from

the date she gets married;

(ii) the family pension payable to such son or daughter shall be stopped if he or she

starts earning his or her livelihood. In such cases it shall be the duty of the

guardian or son or daughter to furnish a certificate to the Corporation every

month that -

(A) he or she has not started earning his or her livelihood;

(B) in case of daughter that she has not yet married;

216

(d) if a deceased employee or pensioner leaves behind a widow or widower, the family

pension shall become payable to the widow or widower, failing which to the eligible child;

(e) family pension to the children shall be payable in the order of their birth and the younger

of them shall not be eligible for family pension unless the elder next above him or her has

becomes ineligible for the grant of family pension;

Provided that where the family pension is payable to twin children it shall be paid in the

manner set out in clause (f) of the sub-rule (1);

(f) where the family pension is payable to twin children it shall be paid to such children in

equal shares:

Provided that where one such child ceases to be eligible, his or her share shall revert to the

other child and where both of these cease to be eligible, the family pension shall be

payable to the next eligible single child or twin children, as the case may be.

(2) Where a deceased employee or a pensioner leaves behind more children than one, the eldest

eligible child shall be entitled to the family pension for the period mentioned in clauses (b) or (c)

of sub- rule(1), as the case may be, and after the expiry of that period the next child shall

become eligible for the grant of family pension.

(3) Where family pension is granted under this rule to a minor, it shall be payable to the guardian

on behalf of the minor.

(4) In case both wife and husband are employees of the Corporation and are governed by the

provisions of this rule and one of them dies while in service or after retirement, the family

pension in respect of the deceased shall be payable to the surviving husband or wife and in the

event of death of the husband or wife, the surviving child or children shall be granted the two

family pensions in respect of the deceased parents subject to the limits specified below, namely:-

(a) if the surviving child or children is or are eligible to draw two family pensions at the rates

mentioned in sub-clause(i) of clause (a) and sub- clause(i) of clause(b) of sub-rule (3) of rule

39 the amount of both pensions shall be limited to two thousand five hundred rupees only

per mensem in respect of employees who retired or died while in service prior to the 1st

day of November, 1993 and four thousand eight hundred rupees per mensem only in

respect of employees who retired or died on or after the 1st day of November, 1993;

(b) if one of the family pensions ceases to be payable at the rates mentioned in sub-clause (i)

of clause(a) or sub-clause (i) of clause (b) of sub- rule (3) of rule 39 and in lieu thereof the

family pension at the rate mentioned in sub-rule(1) of rule 39 becomes payable, the

amount of both the pensions shall also be limited to two thousand five hundred rupees per

mensem in respect of employees who retired or died while in service prior to the 1st day

of November, 1993 and four thousand eight hundred rupees per mensem in respect of

employees who retired or died on or after the 1st day of November, 1993 ;

amount of the two pensions shall be limited to one thousand two hundred and fifty rupees

per mensem in the case of employees who retired or died while in service prior to the 1st

day of November, 1993 and two thousand four hundred rupees per mensem in respect of

employees who retired or died on or after the 1st day of November, 1993.

*Note : In this sub-rule, for the figures and words “1st day of November, 1993” the figures and

words “1st day of August, 1992”, shall be substituted in respect of employees belonging to

Class-III or Class-IV who have retired or died on or after 1st day of August, 1992 and the figures

and words “1st day of April, 1993” shall be substituted in respect of Officers belonging to

Class-I and Class-II who have retired or died on or after 1st day of April, 1993.

* Note to sub-rule 4 of Rule 40 which was inserted vide Govt. Notification dated 22.4.1997 has been amended vide Govt.

Notification dated 14.5.1999.

217

(5) (a) Where family pension is payable to more widows than one, the family pension shall be paid

to the widows in equal shares;

(b) on the death of a widow, her share of the family pension shall become payable to her

eligible child:

Provided that if the widow is not survived by any child, her share of the family pension shall

not lapse but shall be payable to the other widows in equal shares, or if there is only one

such other widow, in full, to her;

eligible child or children from another wife who is not alive, the eligible child or children

shall be entitled to the share of family pension which the mother would have received if she

had been alive at the time of the death of the employee or pensioner:

Provided that on the share or shares of family pension payable to such a child or children

or to a widow or widows ceasing to be payable, such share or shares shall not lapse, but

shall be payable to the other widow or widows or to other child or children otherwise

eligible, in equal shares, or if there is only one widow or child, in full, to such widow or

child;

(d) where the family pension is payable to twin children it shall be paid to such children in the

manner specified in clause (f) of sub-rule (1) above;

(e) except as provided in this sub-rule the family pension shall not be payable to more than

one member of the family at the same time.

(6) Where a female employee or male employee dies leaving behind a judicially separated husband

or widow and no child or children, the family pension in respect of the deceased shall be payable

to the person surviving:

Provided that where in a case the judicial separation is granted on the ground of adultery and

the death of the employee takes place during the period of such judicial separation, the family

pension shall not be payable to the person surviving if such person surviving was held guilty of

committing adultery.

(7) (a) Where a female employee or male employee dies leaving behind a judicially separated

husband or widow with a child or children, the family pension payable in respect of the

deceased shall be payable to the surviving person provided he or she is the guardian of

such child or children;

(b) where the surviving person has ceased to be the guardian of such child or children, such

family pension shall be payable to the person who is the actual guardian of such child or

children.

(8) If the son or unmarried daughter eligible for the grant of family pension has attained the age of

eighteen years, the family pension may be paid to such son or unmarried daughter directly.

(9) (a) If a person who, in the event of death of an employee while in service, is eligible to receive

family pension under these rules is charged with the offence of murdering the employee or

for abetting in the commission of such an offence, the claim of such a person, including

other eligible member or members of the family to receive the family pension, shall remain

suspended till the conclusion of the criminal proceedings instituted against him;

(b) if on the conclusion of the criminal proceedings referred to in clause(a),the person

concerned -

(i) is convicted for the murder or abetting in the murder of the employee, such a person

shall be debarred from receiving the family pension which shall be payable to the

other eligible member of the family, from the date of death of the employee;

(ii) is acquitted of the charge of murder or abetting in the murder of the employee, the

family pension shall be payable to such a person from the date of death of the

employee;

payable on the death of an employee after his retirement.

218

CHAPTER-VIII

COMMUTATION

41. Commutation -

(1) An employee shall be entitled to commute for a lump sum payment of a fraction not exceeding

one-third of his pension:

Provided that in respect of an employee who is governed by sub-rule (5) of rule 3 of these rules,

the family of such employee shall also be entitled to commute for a lump sum payment a

fraction not exceeding one-third of the pension admissible to the employee.

(2) An employee shall indicate the fraction of pension which he desires to commute and may either

indicate the maximum limit of one-third pension or such lower limit as he may desire to

commute.

(3) If fraction of pension to be commuted results in fraction of rupee, such fraction of a rupee shall

be ignored for the purpose of commutation.

(4) The lump sum payable to an applicant shall be calculated in accordance with the Table given

below:-

TABLE

Commutation Values for a pension of Re. one per annum

Age next Commutation Age next Commutation Age next Commutation

birthday value expressed birthday value expressed birthday value expressed

as number of as number of as number of

year’s purchase year’s purchase year’s purchase

17 19.28 42 15.40 67 7.85

18 19.20 43 15.15 68 7.53

19 19.11 44 14.90 69 7.22

20 19.01 45 14.64 70 6.91

21 18.91 46 14.37 71 6.60

22 18.81 47 14.10 72 6.30

23 18.70 48 13.82 73 6.01

24 18.59 49 13.54 74 5.72

25 18.47 50 13.25 75 5.44

26 18.34 51 12.95 76 5.17

27 18.21 52 12.66 77 4.90

28 18.07 53 12.35 78 4.65

29 17.93 54 12.05 79 4.40

30 17.78 55 11.73 80 4.17

31 17.62 56 11.42 81 3.94

32 17.46 57 11.10 82 3.72

33 17.29 58 10.78 83 3.52

34 17.11 59 10.46 84 3.32

35 16.92 60 10.13 85 3.13

36 16.72 61 9.81

37 16.52 62 9.48

38 16.31 63 9.15

39 16.09 64 8.82

40 15.87 65 8.50

41 15.64 66 8.17

219

Notes :-

(1) The Table above indicates the commuted value of pension expressed as number of years’

purchase with reference to the age of the pensioner as on his next birthday. The

commuted value in the case of an employee retiring at the age of fifty eight years is 10.46

years’ purchase and, therefore, if he commutes rupees one hundred from his pension

within one year of retirement, the lump sum amount payable to him works out to

Rs.100 X 10.46 X 12 = Rs.12,552.

(2) An employee who had commuted the admissible portion of pension is entitled to have the

commuted portion of the pension restored after the expiry of a period of fifteen years

from the date of commutation.

(3) An applicant who is authorised a superannuation pension, voluntary retirement pension,

invalid pension or compassionate allowance shall be eligible to commute a fraction of his

pension under these rules.

(4) In the case of a pensioner eligible for superannuation pension or pension on voluntary

retirement, no medical examination shall be necessary, if the application for commutation

is made within one year from the date of retirement. However, if such a pensioner applies

for commutation of pension after one year from the date of his retirement, the same will

be permitted subject to medical examination.

Explanation.- An applicant who -

(i) retires on invalid pension under rule 32 of these rules, or

(ii) is in receipt of compassionate allowance under rule 33 of these rules,

shall be eligible to commute a fraction of his pension subject to the limit

specified in sub-rule (1) after he has been declared fit by a medical officer

approved by the Corporation.

(5) The commutation of pension shall become absolute in the case of an employee -

(a) retiring on superannuation or voluntary retirement who submits an application for

commutation of pension before the date of retirement, on the date following the date

of retirement :

Provided that the employee governed by sub-rule(3) of rule 31 shall not apply for

commutation of a part of his pension before the expiry of the notice of three months

and the commutation of pension shall become absolute only on the expiry of the

period of notice referred to in sub-rule (1) of rule 31;

(b) retiring on superannuation or on voluntary retirement if he applies for commutation

of pension after the date of retirement but before the completion of one year from

the date of retirement, on the date the application for commutation is received by

the Competent Authority;

of pension after one year from the date of retirement, on the date of the medical

certificate given by a medical officer approved by the Corporation;

(d) who has retired prior to the 1st day of November, 1993 and who opts to be

governed by these rules, on the 1st day of November, 1993, where the application

for commutation is made within the period specified by clause (b) of the sub-rule (1) of

rule 3;

220

(e) who was in the service of the Corporation on or after the 1st day of November, 1993

but who retired prior to the publication of these rules, on the day immediately

following the date of his retirement, where the application is made within the period

specified by clause (b) of sub- rule (2) of rule 3;

(f) who retired on or after the 1st day of November, 1993, but died prior to the notified

date, on the day immediately following the date of his retirement, where the

application for commutation is made by the family of the deceased within the period

specified by clause (a) of sub-rule(5) of rule 3;

(g) in respect of whom invalid pension under rule 32 or compassionate allowance under

rule 33 is admissible, commutation shall become absolute on the date of the medical

certificate given by a medical officer approved by the Corporation.

221

CHAPTER-IX

GENERAL CONDITIONS

42. Pension subject to future good conduct - Future good conduct shall be an implied condition of every

grant of pension and its continuance under these rules.

43. Withholding or withdrawal of Pension - The Competent Authority may, by order in writing, withhold

or withdraw a pension or a part thereof, whether permanently or for a specified period, if the

pensioner is convicted of a serious crime or is found guilty of grave misconduct:

Provided that where a part of pension is withheld or withdrawn, the amount of such pension shall not

be reduced below the minimum pension per mensem payable under these rules.

44. Conviction by Court - Where a pensioner is convicted of a serious crime by a Court of Law, action

shall be taken in the light of the judgement of the court relating to such conviction.

45. Pensioner guilty of grave misconduct - In a case not falling under rule 44 if the Competent

Authority considers that the pensioner is prima facie guilty of grave misconduct, it shall, before passing

an order, follow the procedure specified in regulation 39 of the Staff Regulations.

46. Provisional pension -

(1) An employee who has retired on attaining the age of superannuation or otherwise and against

whom any departmental or judicial proceedings are instituted or where departmental

proceedings are continued, a provisional pension, equal to the maximum pension which would

have been admissible to him, would be allowed subject to adjustment against final retirement

benefits sanctioned to him, upon conclusion of the proceedings but no recovery shall be made

where the pension finally sanctioned is less than the provisional pension or the pension is

reduced or withheld etc, either permanently or for a specified period.

(2) In such cases the gratuity shall not be paid to such an employee until the conclusion of the

proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings

subject to the decision of the proceedings. Any recoveries to be made from an employee shall be

adjusted against the amount of gratuity payable.

Explanation - In this chapter -

(a) the expression ‘serious crime’ includes a crime involving an offence under the Official

Secrets Act, 1923 (19 of 1923);

(b) the expression “grave misconduct” includes the communication or disclosure of any secret

official code or password or any sketch, plan, model, article, note, document or

information, such as is mentioned in section 5 of the Official Secrets Act, 1923 (19 of

1923) (which was obtained while holding an office in the Corporation) so as to prejudicially

affect the interests of the general public or the security of the State.

47. Commutation of pension during departmental or judicial proceedings - An employee against

whom departmental or judicial proceedings have been instituted before the date of his retirement or

a person against whom such proceedings are instituted after the date of his retirement, shall not be

eligible to commute a fraction of his provisional pension, or pension, as the case may be, authorised

under these rules, during the pendency of such proceedings.

48. Recovery of Pecuniary loss caused to the Corporation -

(1) The Competent Authority may withhold or withdraw a pension or a part thereof, whether

permanently or for a specified period, and order recovery from pension of the whole or part of

222

any pecuniary loss caused to the Corporation if in any departmental or judicial proceedings the

pensioner is found guilty of grave misconduct or negligence during the period of his service :

Provided that the Executive Committee shall be consulted before any final orders are passed:

Provided further that departmental proceedings, if instituted while the employee was in service,

shall, after the retirement of the employee, be deemed to be proceedings under this rule and

shall be continued and concluded by the authority by which they were commenced in the same

manner as if the employee had continued in service:

Provided also that no departmental or judicial proceedings, if not initiated while the employee

was in service, shall be instituted in respect of a cause of action which arose or in respect of an

event which took place more than four years before such institution.

(2) Where the Competent Authority orders recovery of the pecuniary loss from the pension, the

recovery shall not ordinarily be made at a rate exceeding one-third of the pension admissible on

the date of retirement of the employee:

Provided that where a part of pension is withheld or withdrawn, the amount of pension drawn by

a pensioner shall not be less than the minimum pension payable under these rules.

49. Recovery of Corporation’s dues - The Corporation shall be entitled to recover the dues to the

Corporation on account of housing loans, advances, license fees, other recoveries and recoveries due

to staff co-operative credit society from the commutation value of the pension or the pension or the

family pension.

50. Commercial employment after retirement -

(1) If a pensioner who, immediately before his retirement was holding the post of an officer

belonging to the cadre of Divisional Manager or above and wishes to accept any commercial

employment before the expiry of two years from the date of his retirement, he shall obtain the

previous sanction of the Corporation to such acceptance:

Provided that an employee who was permitted by the Corporation to take up a particular form

of commercial employment during his leave preparatory to retirement or during refused leave

shall not be required to obtain subsequent permission for his continuance in such employment

after retirement.

(2) Subject to the provision of sub-rule (3), the Corporation may, by order in writing, on the

application by a pensioner, grant, subject to such conditions, if any, as it may deem necessary,

permission, or refuse, for reasons to be recorded in the order, permission to such pensioner to

take up the commercial employment specified in the application.

(3) In granting or refusing permission under sub-rule (2) to a pensioner for taking up any

commercial employment, the Corporation shall have regard to the following factors, namely:

(a) the nature of the employment proposed to be taken up and the antecedents of the

employer;

(b) whether his duties in the employment which he proposes to take up might be such as to

bring him into conflict with the Corporation;

whom he proposes to seek employment as it might afford a reasonable basis for the

suspicion that such pensioner had shown favours to such employer;

(d) whether the duties of the commercial employment proposed involve liaison or contact work

with Corporation;

223

(e) whether his commercial duties will be such that his previous official position or knowledge

or experience under Corporation could be used to give the proposed employer an unfair

advantage;

(f) the emoluments offered by the proposed employer; and

(g) any other relevant factor.

(4) Where within a period of sixty days of the date of receipt of an application under sub-rule (3),

the Corporation does not refuse to grant the permission applied for or does not communicate

the refusal to the applicant, the Corporation shall be deemed to have granted the permission

applied for:

Provided that in any case where defective or insufficient information is furnished by the applicant

and it becomes necessary for the Corporation to seek further clarifications or information from

him, the period of sixty days shall be counted from the date on which the defects have been

removed or complete information has been furnished by the applicant.

(5) Where the Corporation grants the permission applied for subject to any conditions or refuses

such permission, the applicant may, within thirty days of the receipt of the order of the

Corporation to that effect, make a representation against any such condition or refusal and the

Corporation may make such orders thereon as it deems fit:

Provided that no order other than an order cancelling such condition or granting such permission

without any conditions shall be made under this sub-rule without giving the pensioner making the

representation an opportunity to show cause against the order proposed to be made.

(6) If any pensioner takes up any commercial employment at any time before the expiry of two

years from the date of his retirement without the prior permission of the Corporation or commits

a breach of any condition subject to such permission to take up any commercial employment has

been granted to him under this rule, it shall be competent for the Corporation to declare by

order in writing and for reasons to be recorded therein that he shall not be entitled to the whole

or such part of the pension and for such periods as may be specified in the order:

Provided that no such order shall be made without giving the pensioner concerned an

opportunity of show cause against such declaration:

Provided further that in making any order under this sub-rule, the Corporation shall have regard

to the following factors, namely:

(i) the financial circumstances of the pensioner concerned;

(ii) the nature of, and the emoluments from, the commercial employment taken up by the

pensioner concerned; and

(iii) any other relevant factor.

(7) Every order passed by the Corporation under this rule shall be communicated to the pensioner

concerned.

(8) In this rule,

(a) the expression “commercial employment” means -

(i) an employment in any capacity including that of an agent, under a company, cooperative

society, firm or individual engaged in trading, commercial, industrial,

financial or professional business and includes also a directorship of such company

and partnership of such firm, but does not include employment under a body

corporate, wholly or substantially owned or controlled by the Central Government or

a State Government;

224

(ii) setting up practice, either independently or as a partner of a firm, as adviser or

consultant in matters in respect of which the pensioner_

(A) has no professional qualifications and the matters in respect of which the

practice is to be set up or is carried on are relatable to his official knowledge or

experience, or

(B) has professional qualifications but the matters in respect of which such practice

is to be set up are such as are likely to give his clients an unfair advantage by

reason of his previous official position, or

the Corporation.

Explanation - For the purpose of this clause, the expression “employment under a

co-operative society” includes the holding of any office, whether elective or otherwise,

such as that of President, Chairman, Manager, Secretary, Treasurer and the like, by

whatever name called in such society.

51. Nomination

(1) The trust shall allow every employee governed by these rules to make a nomination conferring

on one or more persons the right to receive the amount of pensionary benefits under these rules

in the event of his death before that amount becomes payable or, having become payable, has

not been paid. Such nomination shall be made in such form as may be specified by the

Corporation from time to time.

(2) If any employee nominates more than one person under sub-rule (1), he shall, in his nomination,

specify the amount or share payable to each of the nominees in such a manner as to cover the

whole of the amount of the pensionary benefits that may be payable in the event of his death.

(3) A nomination made by an employee may, at any time, be modified or revoked by him after

giving a written notice to the trust of his intention of doing so in such form as the Corporation

may from time to time specify.

(4) A nomination or its revocation or its modification shall take effect to the extent it is valid on the

date on which it is received by the trust.

52. Date from which pension becomes payable -

(1) Except in the case of an employee to whom the provisions of rule 43 and rule 46 apply a

pension other than family pension shall become payable from the date following the date on

which an employee retires.

(2) Family pension shall become payable from the date following the date of death of the employee

or the pensioner.

(3) Pension including family pension shall be payable for the day on which its recipient dies.

53. Currency in which pension is payable - All pensions admissible under these rules shall be payable

in rupees in India only.

54. Manner of payment of pension - A pension fixed at a monthly rate shall be payable monthly on or

after the first day of the following month.

55. Power to issue instructions - The Chairman of the Corporation may from time to time issue

instructions as may be considered necessary or expedient for the implementation of these rules.

225

*55A. Power to Relax - Where the Central Government is satisfied that the operation of any of these rules

causes undue hardship in respect of any class or categories of persons, it may, by order for reasons to

be recorded in writing relax the requirement of the provision of that rule in a manner not inconsistent

with these rules.

56. Residuary provisions - Matters relating to pension and other benefits in respect of which no

express provision has been made in these rules shall be governed by the corresponding provisions

contained in the Central Civil Services (Pension) Rules, 1972 or the Central Civil Services

(Commutation of Pension) Rules, 1981 applicable for central government employees.

* Notified in Gazette of India dated 6.12.1999 and came into force on the date of publication in the official gazette.

226

APPENDIX I

[See clause (f) of rule 2]

Category of Employees Appointing Authority

(1) (2)

*(i) Chairman of the Corporation Central Govt

(ii) Posts in the Cadres of Zonal Manager and

above and equivalent cadres. Corporation

(iii) Posts in the Cadres of Deputy Zonal Executive Committee

Manager/Senior Divisional Manager and

equivalent cadres

(iv) Posts in the Cadre of Assistant Divisional Chairman

Manager, Senior Branch Manager and

equivalent cadres

(v) Posts in the Cadre of Branch Manager/ Managing Director

Administrative Officer.

* Entry (i) inserted vide Govt. Notification dated 3.7.1996

227

APPENDIX II

(See rule 29)

Actual service rendered on Permanent Length of corresponding qualifying service

Part-time basis for each year of service rendered on

permanent part-time basis for calculating

the amount of pension

(1) (2)

Less than 3 hours 1/4th of a year

3 hours or more but less than 4 hours 3/8th of a year

4 hours or more but less than 5 hours 1/2 of a year

5 hours or more but less than 6 hours 5/8th of a year

6 hours or more but less than 7 hours 3/4th of a year

7 hours or more but less than 8 hours 7/8th of a year

228

APPENDIX – III

(See rule 35)

The formula of updating basic pension and additional pension in respect of employees who retired between

the Ist day of January 1986 and the 31st day of July, 1987 shall be as under:

(1) A. Basic pension shall be increased by an amount of -

(a) 50 per cent of first Rs. 1000 of the average Rs.

emoluments reckonable for pension.

(b) 45 per cent of next Rs. 500 Rs.

pension exceeding Rs. 1500

Total of (a + b + c) Rs. (A)

B. 50 per cent of the average monthly emoluments for the Rs. (B)

last 10 months in service prior to retirement.

C. Dearness relief at index number 600 in the All India Average Rs. (C)

Consumer Price Index for Industrial Workers in the series

1960=100, on basic pension calculated at (1) above,

as per Table given below

D. Total increased basic pension

=(B + C) x number of years of qualifying service

(Max. 33 years)

Rs. (D)

E. Basic pension as on 1.11.1993 (rounded off to the next Rs. (E)

higher rupee)

(2) For increase in the additional pension, amount of special allowances counted for making

contributions to Provident Fund will be increased with reference to the quantum of special

allowances ranking for Provident Fund as per the Staff Regulations or Service Rules

229

TABLE

Rates of dearness relief worked out at index no. 600 in the All India Average Consumer Price Index for

Industrial Workers in the series 1960=100 for all classes of employees who retired during the period

1.1.1986 to 31.07.1987:

(a) Class IV employees 80.40 per cent of pension calculated at (1) above

(b) Class III employees drawing pension 67 per cent of pension calculated at (1) above

upto Rs. 757/- per month

relief as under:

Amount of basic pension drawn per month The amount of dearness relief admissible

(Rs.) (Rs.)

(1) (2)

757 to 796 508.00

797 to 804 534.00

805 to 824 540.00

825 to 844 553.00

845 to 864 567.00

865 to 884 580.00

885 to 904 593.00

905 to 924 607.00

925 to 944 620.00

945 to 964 634.00

965 to 984 647.00

985 to 1004 660.00

1025 to 1044 687.00

1045 to 1064 701.00

1065 to 1084 714.00

1085 and above 727.00

(d) Class I and Class II employees shall be eligible for dearness relief as under:

(i) For those drawing basic pension upto 66 per cent of the amount of pension calculated

Rs. 765/- per month as at (1) above subject to a maximum of Rs. 500/-

(ii) For those drawing basic pension from Rs. 500/-

Rs. 766/- to Rs. 1165/- per month

(iii) For those drawing basic pension from 42.90 per cent of the amount of pension

Rs. 1166/- per month or above calculated as at (1) above subject to a maximum

of Rs. 715/-

230

APPENDIX-IV

(See rule 37)

Dearness relief on basic pension shall be as under:

(1) In the case of employees who retired on or after the Ist day of January, 1986, but before the Ist day

of November, 1993, dearness relief shall be payable for every rise or be recoverable for every fall, as

the case may be, of every 4 points over 600 points in the quarterly average of the All India Average

Consumer Price Index for Industrial Workers in the series 1960 = 100. Such increase or decrease in

dearness relief for every said four points shall be calculated in the manner given below:

Scale of basic pension The rate of dearness relief as a

per month percentage of basic pension

(1) (2)

(i) upto Rs. 1250/- 0.67 per cent

(ii) Rs. 1251/- to Rs. 2,000/- 0.67 per cent of Rs. 1250/- plus 0.55 per cent of basic

pension in excess of Rs. 1250/-.

(iii) Rs. 2001/- to Rs. 2130/- 0.67 per cent of Rs. 1250/- plus 0.55 per cent of the

difference between Rs. 2000/- and Rs. 1250/- plus

0.33 per cent of basic pension in excess of Rs. 2000/-

(iv) above Rs. 2130/- 0.67 per cent of Rs. 1250/- plus 0.55 per cent of the

difference between Rs. 2000/- and Rs. 1250/- plus

0.33 per cent of the difference between Rs. 2130/- and

Rs. 2000/- plus 0.17 per cent of basic pension in excess of

Rs. 2130/-.

(2) In the case of employees who retire on or after the 1st day of November, 1993, dearness relief shall

be payable for every rise or be recoverable for every fall, as the case may be, of every 4 points over

1148 points in the quarterly average of the All India Average Consumer Price Index for Industrial

Workers in the series 1960 = 100. Such increase or decrease in dearness relief for every said four

points shall be calculated in the manner given below:

Scale of basic pension The rate of dearness relief as a

per month percentage of basic pension

(1) (2)

(i) upto Rs. 2,400/- 0.35 per cent

(ii) Rs. 2,401 to Rs. 3,850/- 0.35 per cent of Rs. 2,400/- plus 0.29 per cent of basic

pension in excess of Rs. 2,400/-

(iii) Rs. 3,851 to Rs. 4,100/- 0.35 per cent of Rs. 2,400/- plus 0.29 per cent of the

difference between Rs. 3,850/- and Rs. 2,400/- plus

0.17 per cent of basic pension in excess of Rs. 3,850/-

(iv) above Rs. 4,100/- 0.35 per cent of Rs. 2,400/- plus 0.29 per cent of the

difference between Rs. 3,850 and Rs. 2,400/- plus

0.17 per cent of the difference between Rs. 4,100/-

and Rs. 3,850/- plus 0.09 per cent of basic pension in

excess of Rs. 4,100/-

231

*(3) Notwithstanding anything contained in Para (1) and Para (2), in respect of employees belonging to

Class-III and Class-IV, who have retired on or after the 1st day of August, 1992 and in respect of

Officers belonging to Class-I and Class-II, retired on or after 1st day of April, 1993, dearness relief

shall be payable or be recoverable as may be determined from time to time.

@3(A) In case of employees who have retired or died on or after the 1st day of August 1997, the dearness

relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every

4 points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers in

the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be

at the rate of 0.23 per cent of the Basic Pension;

@3(B) In case of any wage revision in future the rate of dearness relief payable to an employee shall be

determined by the Corporation corresponding to the index to which the scale is linked.

(The Corporation has determined that in case of employees who have retired or died on or after

the 1st day of August 2002, the dearness relief shall be payable for every rise or to be

recoverable for every fall, as the case may be, of every 4 points over 2328 points in the quarterly

Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase

or decrease in dearness relief for every said 4 points shall be at the rate of 0.18 per cent of the

Basic Pension).

(4) Dearness relief shall be payable for the half year commencing from the 1st day of February and

ending with 31st day of July on the quarterly average of the index figures published for the months of

October, November and December of the previous year and for the half year commencing from the

1st day of August and ending with the 31st day of January on the quarterly average of the index

figures published for the months of April, May and June of the same year.

(5) In the case of family pension, invalid pension and compassionate allowance, dearness relief shall be

payable in accordance with the rates mentioned above.

(6) Dearness relief will be allowed on full basic pension even after commutation.

(7) Dearness relief is not payable on additional pension.

* Para (3) added vide Govt. Notification dated 22.4.1997 and further amended vide notification dated 14.5.1999.

@ Notified in Gazette of India, Part-III Section 3 dated 22.6.2000

232

APPENDIX - V

(See rule 39)

The ordinary rates of family pension shall be as under:

(a) In respect of employees retired before 1.11.1993

Scale of pay per month Amount of monthly Family Pension

(1) (2)

Upto Rs. 1500 30 per cent of the ‘Pay’ shall be the basic family pension plus 30 per cent

of allowances which are counted for making contributions to Provident Fund

but not for dearness allowance shall be the additional family pension. The

aggregate of basic and additional family pension shall not be less than

Rs. 375 per month.

Rs. 1501 to Rs. 3000 20 per cent of the ‘Pay’ shall be the basic family pension plus 20 per cent

of allowances which are counted for making contributions to Provident Fund

but not for dearness allowance shall be the additional family pension. The

aggregate of basic and additional family pension shall not be less than

Rs. 450 per month.

Above Rs. 3000 15 per cent of the ‘Pay’ shall be the basic family pension plus 15 per cent

of allowances which are counted for making contributions to Provident Fund

but not for dearness allowance shall be the additional family pension.

The aggregate of basic and additional family pension shall not be less than

Rs. 600 per month and more than Rs. 1250 per month.

(b) In respect of employees retired or retiring on or after 1.11.1993

Scale of pay Amount of monthly Family Pension

(1) (2)

Upto Rs. 2870 30 per cent of the ‘Pay’ shall be the basic family pension plus 30 per cent

of the allowances which are counted for making contributions to Provident

Fund but not for dearness allowance shall be the additional family pension.

The aggregate of basic and additional family pension shall be subject to a

minimum of Rs. 720 per month.

Rs. 2871 to Rs. 5740 20 per cent of the ‘Pay’ shall be the basic family pension plus 20 per cent

of the allowances which are counted for making contributions to Provident

Fund but not for dearness allowance shall be the additional family pension.

The aggregate of basic and additional family pension shall be subject to a

minimum of Rs. 860 per month.

Above Rs. 5740 15 per cent of the ‘Pay’ shall be the basic family pension plus 15 per cent

of the allowances which are counted for making contributions to Provident

Fund but not for dearness allowance shall be the additional family pension.

The aggregate of basic and additional family pension shall be subject to a

minimum of Rs. 1150 per month and a maximum of Rs. 2400 per month.

233

*(c) Notwithstanding anything contained in Para (a) or Para (b), in respect of employees belonging to Class-

III or Class-IV who have retired on or after 1st day of August, 1992 or in respect of Officers belonging

to Class-I or Class-II who have retired on or after 1st April, 1993, the ordinary rates of Family Pension

shall be calculated as per the rates prescribed in Para (b) above.

@(d) In respect of employees retired on or after 1st August, 1997, the rate of ordinary family pension shall

be as under:

Scale of pay per month Amount of monthly Family Pension

(1) (2)

Upto Rs. 4,360/- 30 per cent of the “Pay” shall be the basic family pension plus 30 per

cent of the allowances which are counted for making contributions to

Provident Fund but not for dearness allowance shall be the additional

family pension. The aggregate of basic and additional family pension

shall be subject to a minimum of Rs. 1,100/- per month.

Rs. 4,361/- to Rs. 8,700/- 20 per cent of the “Pay” shall be the basic family pension plus 20 per

cent of the allowances which are counted for making contributions to

Provident Fund but not for dearness allowance shall be the additional

family pension. The aggregate of basic and additional family pension

shall be subject to a minimum of Rs. 1,310/- per month.

Rs. 8,701/- and above 15 per cent of the “Pay” shall be the basic family pension plus 15 per

cent of the allowances which are counted for making contributions to

Provident Fund but not for dearness allowance shall be the additional

family pension. The aggregate of basic and additional family pension

shall be subject to a minimum of Rs. 1,740/- per month.

@(e) In case of any wage revision in future the rate of family pension to an employee shall be determined

by the Corporation corresponding to the index to which the scale is linked.

Notes: (1) Dearness relief is not payable on additional family pension.

(2) “Scale of pay” for the purpose of calculation of family pension as above shall be aggregate of

“pay” as defined in sub-clause (o) of rule 2 and “allowances” as defined in the explanation to

sub-rule (3) of rule 35.

* Para (c) to Appendix-V inserted vide Govt. Notification dated 22.4.1997 and further amended vide notification dated

14.5.1999 (effective dated 1.11.93)

@ Notified in Gazette of India, Part-III, Section 3 dated 22.6.2000 (GSR No.553(E))

234

(The Corporation has determined that In respect of employees retired on or after 1st August, 2002, the rate

of ordinary family pension shall be as under):

Scale of pay Amount of monthly Family Pension

(1) (2)

Upto Rs. 5,840/- 30 per cent of the “Pay” shall be the basic family pension plus 30 per

cent of the allowances which are counted for making contributions to

Provident Fund but not for dearness allowance shall be the additional

family pension. The aggregate of basic and additional family pension

shall be subject to a minimum of Rs. 1,480/- per month

Rs. 5,841/- to Rs. 11,640/- 20 per cent of the “Pay” shall be the basic family pension plus 20 per

cent of the allowances which are counted for making contributions to

Provident Fund but not for dearness allowance shall be the additional

family pension. The aggregate of basic and additional family pension

shall be subject to a minimum of Rs. 1,760/- per month

Rs. 11,641/- and above 15 per cent of the “Pay” shall be the basic family pension plus 15 per

cent of the allowances which are counted for making contributions to

Provident Fund but not for dearness allowance shall be the additional

family pension. The aggregate of basic and additional family pension

shall be subject to a minimum of Rs. 2,330/- per month

(F. No. )

Joint Secretary (Insurance)

235

EXPLANATORY MEMORANDUM

The Life Insurance Corporation of India was established under Section 3 of the Life Insurance Corporation,

Act, 1956. The terms and conditions of service of the employees of the Corporation are governed by rules

made by the Central Government under Section 48 and regulations made by the Corporation under

Section 49 of the said Act.

The rules and regulations under Section 48 and Section 49 of the Act do not provide for payment of pension

except for the transferred employees of the Oriental Government Security Life Assurance Company Limited.

There has been persistent demand from the employees of the Corporation for introduction of a pension

scheme in the Corporation. The Corporation in consultation with the Unions of the employees have

recommended introduction of an index-linked pension scheme in lieu of Corporation’s contribution to the

Provident Fund with effect from 1st November, 1993.

The proposed pension scheme will be applicable to those who joined the service of the Corporation on or

after 1.11.1993. However the benefit of the pension scheme is proposed to be extended to those who

retired or died on or after 1.1.1986. It is also proposed to provide the benefit of family pension in respect

of those employees who died subject to fulfilling certain conditions.

It is certified that no employee of the Corporation is likely to be affected adversely by the introduction of the

pension scheme with retrospective effect.

Foot Note : The principal rules were published vide GSR No.525(E) dated 28.6.1995 and subsequently amended as under :

1. GSR No. 265(E) dated 03.07.1996

2. GSR No. 225(E) dated 22.04.1997

3. GSR No. 349(E) dated 14.05.1999

4. GSR No. 804(E) dated 06.12.1999 and

5. GSR No. 553(E) dated 22.06.2000.

**** In exercise of powers conferred by Sec. 48 Of the L.I.C. Act,1956 (31 of 1956), the Government of India while

Notification dated 05.09.2005 Revised the Pay Scales and other service conditions of employees of the L.I.C. of India

w.e.f. 01.08.2002.

As a consequence of the same the relevant provisions of LIC of India (Employees) Pension Rules are necessary to be amended. The

Government of India vide Notification dated 22.06.2000, empowered the Corporation to amend the relevant provisions to

determine the amount of Minimum Pension, Dearness Relief and Family Pension.

The instructions based on this Rule have been amended w.e.f. 01.08.2002.

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

(PUBLISHED IN) The Gazette of India, Extraordinary PART II - Section 3 - Sub section (ii)) GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF ECONOMIC AFFAIRS) (INSURANCE DIVISION) NEW DELHI, the 28th June, 1995. NOTIFICATION S.O.585(E) In exercise of the powers conferred by section 17 A of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972), the Central Government hereby makes the following scheme, namely :- CHAPTER - I PRELIMINARY

Short title and commencement.

(1)

This Scheme may be called the General Insurance (Employees') Pension Scheme, 1995.

(2)

Save as otherwise expressly provided in this scheme, this scheme shall be deemed to have come into force on the 1st day of November, 1993.

*(3)

Notwithstanding anything contained in sub-paragraph (2) of General Insurance (Employees') Pension (Amendment) Scheme, 1999, where any retired employee gives a notice in writing to the Corporation within ninety days of publication this Scheme in the Official Gazette, expressing the option not to be governed by the provisions of General Insurance (Employees') Pension (Amendment) Scheme, 1999, then the Corporation may, by order, permit such employee not to be governed by this Scheme.

Definitions - In this scheme, unless the context otherwise requires -

(a)

"Act" means the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972);

(b)

"actuary" shall have the meaning assigned to it in clause (1) of section (2) of the Insurance Act, 1938 (4 of 1938);

(c)

"Appendix" means an appendix annexed to this scheme;

* Substituted vide S.O. 461(E) dated 18th June, 1999

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

madhurin 7/3/2009

(d)

"average emoluments" means the average of pay drawn by an employee during the last ten months of his service;

(e)

"child" means a child of the employee, who, if a son, is under twenty five years of age and if a daughter, is unmarried and is under twenty-five years of age and the expression "children" shall be construed accordingly ;

(f)

“Company" means National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance Company Limited, and United India Insurance Company Limited;

(g)

"competent authority" means -

*(i)

in the case of posts of **Chairman-cum-Managing Director of the Corporation and in the case of Chairman-cum-Managing Director of the Company, the Central Government;

(ii)

in the case of officers belonging to the cadre of General Manager or Assistant General Manager in the Corporation, the **Chairman-cum-Managing Director of the Corporation, and in the case of officers belonging to the cadre of General Manager or Assistant General Manager in the Company, the Chairman-cum-Managing Director of the Company;

(iii)

in the case of officers belonging to the cadre of Manager or Deputy Manager in the Corporation, the **Chairman-cum-Managing Director of the Corporation, and in the case of officers belonging to the cadre of Manager or Deputy Manager in the Company, the Chairman-cum-Managing Director of the Company;

(iv)

in the case of officers belonging to other cadres in the Corporation, the General Manager in-charge of Personnel of the Corporation, and in the case of officers belonging to other cadres in the Company, the General Manager in-charge of Personnel of the Company;

(v)

in any other case in the Corporation, the Manager in-charge of Personnel of the Corporation and in any other case in the Company, the Manager in-charge of Personnel of the Company.

(h)

"contribution" means any sum credited by the Corporation or a Company, as the case may be, on behalf of an employee to the Fund, but shall not include any sum credited as interest;

(i)

"Corporation" means the General Insurance Corporation of India formed under Section 9 of the Act;

(j)

"date of retirement" means the last day of the month in which an employee attains the age of superannuation or the date on which he is retired by the Corporation or a Company or the date on which the employee voluntarily retires;

* Clause (i) substituted vide S.O. 475(E) dated 3rd July, 1996. ** The words “Chairman and Managing Director or Chairman-cum-Managing Director” replaced with “Chairman-cum-Managing Director” vide S.O.634(E) dated 4.5.2005 w.e.f. 1.2.2005.

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

madhurin 7/3/2009

(k)

"employee" means any person employed in the service of the Corporation or a Company on full time work on permanent basis and who opts and is governed by this scheme;

*”Provided that where the ****Chairman-cum-Managing Director of the Corporation or Chairman-cum-Managing Director of the Company, was an employee of the Corporation or the Company, immediately preceding his appointment to the post of ****Chairman-cum-Managing Director of the Corporation or the Company, as the case may be, then such ****Chairman-cum-Managing Director of the Corporation or the Company, shall also be deemed to be an employee of the Corporation or the Company, as the case may be, for the purposes of this scheme, subject to the terms of any contract, agreement or letter of appointment or directions issued by the Central Government.”

(l)

"family" in relation to an employee means -

(i)

wife in the case of a male employee or husband in the case of a female employee;

(ii)

a judicially separated wife or husband, such separation not being granted on the ground of adultery and the person surviving was not held guilty of committing adultery;

(iii)

son who has not attained the age of twenty five years and unmarried daughter who has not attained the age of twenty five years including such son or daughter adopted legally;**

(m)

"financial year" means a year commencing on the first day of April;

(n)

"Fund" means a fund constituted under paragraph 5 of this scheme;

(o)

"notified date" means the date on which this scheme is published in the Official Gazette;

***Provided that the „notified date‟ in relation to employees mentioned in proviso to clause (k) shall mean the date on which this Amendment Scheme is published in the Official Gazette;

* proviso added to clause (k) vide S.O. 475(E) dated 3rd July, 1996. ** the words “before retirement” at the end of sub-clause(iii) deleted vide S.O.475(E) dated 3rd July, 1996 *** proviso added vide S.O.475(E) dated 3rd July, 1996. **** The words “Chairman and Managing Director or Chairman-cum-Managing Director” replaced with “Chairman-cum-Managing Director” vide S.O.634(E) dated 4.5.2005 w.e.f. 1.2.2005.

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

madhurin 7/3/2009

(p)

*"Pay" includes -

(i)

the basic pay including the stagnation increments, if any; and

#(ii)

all allowances to the extent counted for purpose of making contributions to the Provident Fund as per the provisions of Rationalisation Scheme applicable to the employee; and

#(iii)

fixed personal allowance to the extent counted for the purpose of making contributions to the Provident Fund as per the provisions of Rationalisation Scheme applicable to the employee; and ;

(iv)

**Omitted.

Provided that for the purpose of calculating average emoluments, as defined under clause (d) of paragraph 2, in respect of employees whose ten months period before retirement falls partly under pre-revised pay scales and partly under the revised pay scales, the pay for the period for which they have drawn pay as per pre-revised scales may be updated by including the dearness allowance actually drawn by them or the dearness allowance upto the All India Consumer Price Index to which the revised basic pay is pegged, whichever is less.

***

(q)

"pension" includes the basic pension and the additional pension referred to in Chapter-VI of this scheme;

(r)

"pensioner" means an employee eligible for pension under this scheme;

(s)

"qualifying service" means the service rendered while on duty or otherwise which shall be taken into account for the purpose of pension under this scheme;

* proviso substituted vide S.O.461(E) dated 18th June, 1999. ** Omitted w.e.f. 1.1.1996 in view of paragraph 54B inserted vide S.O. 775 (E) dated 13th August, 2001 in relation to Chairman/MD/CMD retired/died while in service after 1.1.1996 # sub-clause (ii) and (iii) substituted vide S.O.590 (E) dt.22.6.2000 w.e.f. 1.8.1997 *** Pensionary benefits will be calculated for employees belonging to Officers and Class III/IV cadre on the basis of revised pay as follows :-

Employees retired on or after the date

Pay as per Rat.Scheme linked to AICPI

Before 1.8.1992

600

1.8.1992

1148

1.8.1997

1740

1.8.2002 (@)

2328

@ However, for employees who have opted for SVRS under the General Insurance Officers’ Special Voluntary Scheme, 2004 vide Notification S.O.455(E) dated 1.4.2004 and General Insurance Employees’ Special Voluntary Scheme, 2004 vide Notification S.O.454(E) dated 1.4.2004, the pensionary benefits will be calculated on the basis of Pay linked to AICPI 1740 points.

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(t)

"retirement" means -

(i)

the retirement in accordance with the provisions contained in paragraph 12 of General Insurance (Rationalisation and Revision of Pay Scales and Other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Scheme,1974 notified under the notification of Government of India, in the Ministry of Finance(Department of Revenue and Insurance) number S.O.326(E) dated the 27th May, 1974;

(ii)

the retirement in accordance with the provisions contained in paragraph 4 of the General Insurance (Termination, Superannuation and Retirement of Officers and Development Staff) Scheme, 1976 notified under notification of Government of India, in the Ministry of Finance (Department of Economic Affairs) number S.O.627(E) dated 21st September,1976;

(iii)

voluntary retirement in accordance with the provisions contained in paragraph 30 of this scheme;

(u)

"Rationalisation Scheme" means -

(i)

the General Insurance (Rationalisation and Revision of Pay Scales and Other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Scheme, 1974, notified under the notification of Government of India, in the Ministry of Finance (Department of Revenue and Insurance) number S.O.326(E) dated the 27th May, 1974;

(ii)

the General Insurance (Rationalisation of Pay Scales and Other Conditions of Service of Officers) Scheme, 1975 notified under the notification of Government of India, in the Ministry of Finance (Department of Revenue and Insurance ) number S.O. 521 (E) dated the 17th September,1975;

(iii)

the General Insurance (Rationalisation of Pay Scales and Other Conditions of Service of Development Staff) Scheme, 1976, notified under the notification of Government of India, in the Ministry of Finance (Department of Economic Affairs) number S.O.327(E) dated 29th April,1976;

(iv)

the General Insurance (Termination, Superannuation and Retirement of Officers and Development Staff) Scheme, 1976, notified under the notification of Government of India, in the Ministry of Finance (Department of Economic Affairs) number S.O. 627(E) dated the 21st September,1976;

(v)

"trust" means the trust of the Corporation or a Company constituted under sub-paragraph (1) of paragraph 5;

(w)

"trustee" means the trustee of a Fund constituted under paragraph 5;

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(x)

"trustee of the Provident Fund" means the trustee of the Provident Fund relating to the employees of the Corporation or a Company, as the case may be;

(y)

all other words and expressions used in this scheme and not defined, but defined in the Act, or the Rationalisation Schemes shall have the same meanings respectively assigned to them in that Act or the respective Rationalisation Schemes.

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CHAPTER - II APPLICATION AND ELIGIBILITY

Application - This scheme shall apply to employees who -

(1)

(a)

were in the service of the Corporation or a Company, as the case may be, on or after the first day of January, 1986 but had retired before the first day of November, 1993 ; and

(b)

exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and

(c)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (b), the entire amount of the Corporation's contribution or the Company's contribution to Provident Fund including interest accrued thereon together with a further simple interest at the rate of six per cent per annum on the said amount from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Corporation or a Company, as the case may be; and

(d)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (b), the entire amount of non-refundable withdrawal if any made from Corporation's contribution or the Company's contribution to the Provident Fund account and interest accrued thereon, prior to the date of final settlement of the Provident Fund account, together with interest at the rate of twelve per cent per annum from the date of withdrawal till the date of settlement of the Provident Fund account together with a further simple interest on the said amount at the rate of six per cent per annum from the date of settlement of the Provident Fund account till the date of refund; or

(2)

(a)

have retired on or after the 1st day of November, 1993 but before the notified date; and

(b)

exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund ; and

(c)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (b), the entire amount of the Corporation's contribution or the Company's contribution as the case may be, to the Provident Fund and interest accrued thereon together with a further simple interest at the rate of twelve per cent per annum on the said amount from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Corporation or the Company as the case may be; and

(d)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (b), the entire amount of non-refundable withdrawal, if any made from the Corporation's contribution or the Company's contribution as the case may be to the Provident Fund account and interest accrued thereon, prior to the date of final settlement of the Provident Fund account, together with interest at the rate of twelve per cent per annum from the date of withdrawal till the date of settlement of Provident Fund account together with a further simple interest on the said amount at the rate of six per cent per annum from the date of settlement of the Provident Fund

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account till the date of refund ; or

(3)

(a)

are in the service of the Corporation or a Company before the notified date and continue to be in the service of the Corporation or a Company on or after the notified date; and

(b)

exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund ; and

(c)

authorise the trust of the Provident Fund to transfer the entire contribution of the Corporation or of the Company to their Provident Fund along with the interest accrued thereon to the credit of the Fund constituted for the purpose under paragraph 5; and

(d)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in sub-paragraph (b), to the Corporation or a Company, as the case may be, any non refundable withdrawal made from the Corporation's contribution or the Company's contribution to the Provident Fund account and interest accrued thereon together with interest at the rate of twelve per cent per annum from the date of such withdrawal until the date of its refund to the Corporation or the Company; or

(4)

join the service of the Corporation or a Company as the case may be, on or after the notified date; or

(5)

were in the service of the Corporation or a Company, as the case may be during any time on or after the 1st day of November, 1993 and had died after retirement but before the notified date, their family shall be entitled for the amount of pension payable to them from the date on which they would have been entitled to pension under this scheme had they been alive till the date on which they died, if the family of the deceased -

(a)

exercises an option in writing within one hundred and twenty days from the notified date to become member of the Fund ; and

(b)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (a) above, the entire amount of the Corporation's contribution or a Company's contribution to the Provident Fund and interest accrued thereon together with a further simple interest at the rate of twelve per cent per annum from the date of settlement of the provident Fund account till the date of refund of the aforesaid amount to the Corporation or to the Company as the case may be; and

(c)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (a) above, any non-refundable withdrawal made from the Corporation's contribution or a Company's contribution to the Provident Fund account and interest accrued thereon prior to the date of final settlement of the Provident Fund account together with further simple interest on the said amount at the rate of twelve per cent per annum from the date of withdrawal till the date of refund of the aforesaid amount to the Corporation or to a Company, as the case may be; or

(6)

joined the service of the Corporation or a Company on or after the 1st day of November, 1993 but who have died while in the service of the Corporation or the Company, as the case may be, before the notified date, their family shall be entitled to the family pension under this scheme. Provided that the family of such a

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deceased employee refund within one hundred and eighty days from the notified date, the entire amount of the Corporation's contribution or a Company's contribution to the Provident Fund, if any, and interest accrued thereon together with further simple interest at the rate of twelve per cent per annum from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Corporation or the Company, as the case may be; or

Provided further that the family of such a deceased employee shall apply in writing for grant of family pension; or

(7)

were in the service of the Corporation or a Company, as the case may be, during any time on or after the 1st day of January, 1986 and had died while in service on or before the 31st day of October, 1993 or had retired on or before the 31st day of October, 1993 but died before the notified date in which case their family shall be entitled to the family pension under this scheme, if the family of the deceased -

(a)

exercises an option in writing within one hundred and twenty days from the notified date to become member of the Fund ; and

(b)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (a) above, the entire amount of the Corporation contribution or the Company's contribution, as the case may be, to the Provident Fund and interest accrued thereon together with a further simple interest at the rate of six per cent per annum from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Corporation or the Company, as the case may be; and

(c)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (a), the entire amount of non-refundable withdrawal from the Corporation's contribution or the Company's contribution, as the case may be, to the Provident Fund account and interest accrued thereon, prior to the date of final settlement of Provident Fund account, together with interest at the rate of twelve per cent per annum from the date of withdrawal till the date of settlement of Provident Fund account together with a further simple interest on the said amount at the rate of six per cent per annum for the date of settlement of the Provident Fund account till the date of refund; or

(8)

joined the service of the Corporation or a Company on or before the 31st day of October, 1993 and who died while in service on or after the 1st day of November, 1993, but before the notified date in which case their families shall be entitled to family pension under this scheme if the family of the deceased employee -

(a)

exercises an option in writing within one hundred and twenty days from the notified date to become a member of the Fund of the Corporation or a Company, as the case may be; and

(b)

refunds within sixty days from the date of expiry of the said period of one hundred and twenty days specified in clause (a) above, the entire amount of the Corporation's contribution or a Company's contribution, as the case may be, to the Provident Fund, including interest accrued thereon, together with a further simple interest at the rate of twelve per cent per annum from the date of settlement of the Provident Fund account of the employee till the date of refund of the aforesaid amount to the Corporation or the Company as the case may be; and

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(c)

refunds within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (a), the entire amount of non-refundable withdrawal if any, made from the Corporation's contribution or the Company's contribution as the case may be, to the Provident Fund account and interest accured thereon, prior to the date of final settlement of the Provident Fund account, together with interest at the rate of twelve per cent per annum from the date of withdrawal till the date of settlement of the Provident Fund account together with a further simple interest on the said amount at the rate of six per cent per annum from the date of settlement of the Provident Fund account till the date of refund; or

(9)

*(a)

joined the services of the Corporation or the Company, as the case may be, before the 28th day of June, 1995, and are in its service on the notified date; and

(b)

exercise an option in writing within one hundred and twenty days from the date of publication of this notification to become the member of the Fund; and

(c)

authorise the Trusty of the Provident Fund to transfer the entire contribution of the Corporation or of the Company to their Provident fund alongwith the interest accrued thereon to the credit of the Fund constituted for the purpose under paragraph 5; and

(d)

refund within sixty days after the expiry of the said period of one hundred and twenty days specified in item (b) of this sub-paragraph, to the Corporation or the Company, as the case may be, any non-refundable withdrawal made from the Corporation‟s contribution or the Company‟s contribution to the Provident Fund account and interest accrued thereon together with interest at the rate of 12% per annum from the date of such withdrawal until the date of its refund to the Corporation or the Company.

Note :

(1)

For the purpose of this paragraph, other than sub-paragraph (3), “notified date” shall mean the date of publication of the General Insurance (Employees‟) Pension (Amendment) Scheme, 1997.

Option to subscribe to the Provident Fund -

(1)

Notwithstanding anything contained in sub-paragraph (4) of paragraph 3, an employee who joins the service of the Corporation or a Company, as the case may be, on or after the notified date, at the age of thirty five years or more, may, within a period of ninety days from the date of his appointment elect to forego his right to pension, whereupon this scheme shall not apply to him.

(2)

The option referred to in sub-paragraph (1) above and paragraph 3 once exercised, shall be final.

* Sub-paragraph (9) inserted vide S.O.342(E) dated 22nd April, 1997.

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CHAPTER - III FUND

Constitution of the Fund -

(1)

The Corporation and each Company shall constitute a Fund specified in column (2) of the Table given below, under an irrevocable trust within a period of one hundred and twenty days from the notified date :-

(2)

The Fund shall have for its sole purpose the provisions of the payment of pension or family pension in accordance with this scheme to the employee or his family.

(3)

The Corporation or the Company, as the case may be, shall be a contributor to the Fund and shall ensure that sufficient sums are placed in it to enable the trust to make due payment to the beneficiaries under this scheme.

Liability of the Provident Fund trust - The Provident Fund trust of the Corporation or the Company, as the case may be, shall, immediately after the constitution of the Fund transfer to each of the Fund referred to in paragraph 5 the accumulated balance of the contribution of the Corporation or the Company, to the Provident Fund of the Corporation or the Company and interest accrued thereon upto the date of such transfer in respect of every employee.

TABLE

Name of the Corporation/Company (1)

Name of Fund (2)

(1) General Insurance Corporation of India

General Insurance Corporation (Employees') Pension Fund

(2) National Insurance Company Limited

National Insurance Company (Employees') Pension Fund

(3) The New India Assurance Company Limited

The New India Assurance Company (Employees') Pension Fund

(4) The Oriental Insurance Company Limited

The Oriental Insurance Company (Employees') Pension Fund

(5) United India Insurance Company Limited

United India Insurance Company (Employees') Pension Fund

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Composition of the Fund - Each Fund shall consist of the following, namely:- (1) the contribution by the Corporation or the Company as the case may be, at the rate of ten per cent per month of the pay of the employees.

* Explanation 1 - For the purpose of this paragraph "pay" includes -

(i)

the basic pay,

(ii)

allowances other than dearness allowance which count for the purposes of making contribution to the Provident Fund and payment of dearness allowance;

(iii)

dearness allowance payable on the basic pay and the allowances specified in clause (ii) above, upto Index Number 1148 in the quarterly average of the All India Consumer Price Index for Industrial Workers in the series 1960=100; and

(iv)

allowances to the extent they count for Provident Fund, house rent allowance, gratuity and for refixation of salary on promotion:

Provided that the Corporation or a Company, as the case may be, shall not make any contribution to the account of the Provident Fund of the employee;

* Explanation 2 - On and from the date of publication of the General Insurance (Employees‟) Pension (Amendment) Scheme, 1997, “Pay” includes -

(i)

the basic pay;

(ii)

allowances other than Dearness Allowance which count for the purpose of making contributions to the Provident Fund and also Payment of Dearness Allowance;

(iii)

allowance to the extent they count for Provident fund, House Rent Allowance, Gratuity and Refixation of Salary on promotion :

Provided that the Corporation or the Company, as the case may be, shall not make any contribution to the account of the Provident Fund of the employee;

(2)

the accumulated contributions of the Corporation or a Company as the case may be to the Provident Fund and interest accrued thereon, upto the date of such transfer in respect of such employees.

(3)

the amount consisting of contribution of the Corporation or a Company, as the case may be, alongwith interest refunded by the employees, who had retired before the notified date but who opt for pension in accordance with the provisions contained in this scheme.

* Explanation renumbered as „Explanation 1‟, and after Explanation 1, Explanation 2 added vide S.O.342(E) dated 22nd April, 1997.

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(4)

the investment in annuities or securities purchased out of the monies of the Fund and interest thereon.

(5)

amount of any capital gains arising from the capital assets of the Fund.

(6)

the additional annual contribution made by the Corporation or a Company, as the case may be in accordance with provisions contained in paragraph 11 of this scheme.

(7)

any income from investments of the amounts credited to the Fund.

(8)

the amount consisting of contribution of the Corporation or a Company as the case may be along with interest refunded by the families of the deceased employees.

(9)

non-refundable amount of Corporation's contribution or a Company‟s contribution as the case may be, and interest thereon refunded by the employees.

Board of Trustees -

(1)

The Board of trustees shall consist of such number of persons not less than three and not more than nine, as may be determined by the Corporation or a Company, as the case may be, to be appointed by the Corporation or the Company as the case may be.

(2)

The power to appoint the trustees shall be vested with the Corporation or a Company, as the case may be and all such appointments shall be made in writing.

(3)

The Corporation or a Company, as the case may be, shall nominate one of the trustees to be the Chairman of the Board of trustees. The Corporation or a Company, as the case may be, shall also nominate a trustee to be an alternate Chairman who shall act as Chairman in the absence of the Chairman.

Trustees to carry out the directions of the Corporation or a Company - The trustees shall comply with all such directions, as may be given by the Corporation or a Company, as the case may be, for the proper functioning of the Fund.

10.

Books of accounts of the Fund -

(1)

The accounts of the Fund shall contain the particulars of all financial transactions relating to the Fund in such form as may be specified by the Corporation or a Company, as the case may be;

(2)

Within one hundred eighty days from the closing of each financial year, the Trust shall prepare a financial statement indicating therein general account of the assets and liabilities of the trust and forward a copy of the same to the Corporation or a Company, as the case may be.

(3)

The accounts of the Fund of the Corporation shall be audited in accordance with the provisions of section 619 of the Companies Act, 1956 (1 of 1956).

(4)

The accounts of the Fund of a Company shall be audited in accordance with the provisions of section 224 of the Companies Act, 1956 (1 of 1956).

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11.

Actuarial investigation of the Fund - The Corporation or a Company, as the case may be shall cause an investigation to be made by an Actuary into the financial condition of the Fund every financial year, on the 31st day of March, and make such additional annual contributions to the Fund as may be required to secure payment of the benefits under this scheme :

Provided that the Corporation or a Company, as the case may be cause an investigation to be made by an actuary into the financial condition of the Fund as on the 31st day of March immediately following the financial year in which the Fund is constituted.

12.

Investment of Fund - All monies contributed to the Fund or received or accruing by way of interest or otherwise to the Fund, shall, within a reasonable time from the date of the contribution, receipt or accrual, as the case may be, be dealt in accordance with rule 85 and clause (ii) of rule 89 of the Income-tax Rules 1962, made under the Income-tax Act, 1961 (43 of 1961) and payable both in respect of capital and interest in India as applicable, in the Fund.

13.

Payment out of the Fund - The payment of benefits by the trust shall be administered as follows, namely:-

*(a)

the trust shall purchase immediate annuities from the Life Insurance Corporation of India or any of the Life Insurance Companies in India registered with Insurance Regulatory and Development Authority (IRDA) in respect of each employee or his family as the case may be at the time of he or his family becomes eligible for the benefits under this scheme or, in respect of family pension, on his death;

(b)

the trust shall, subject to the availability of additional sums in the Fund, to be provided by the Corporation or by the Company, as the case may be, as required under sub-paragraph (3) of paragraph 5, purchase additional annuity as and when it becomes necessary to revise upwards the benefits payable in accordance with this scheme;

(c)

the trust shall in the event of the benefits payable under this scheme being revised downwards for any reason whatsoever credit the benefits received from the Life Insurance Corporation of India under the annuities purchased as exceed the benefits payable under this scheme, to the Fund.

* amended vide S.O.778(E) dated 5th July, 2004 w.e.f. 31.3.2004.

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CHAPTER - IV QUALIFYING SERVICE

14.

Qualifying Service - Subject to the other condition contained in this scheme, an employee who has rendered a minimum ten years of service in the Corporation or a Company, on the date of retirement shall qualify for pension.

15.

Commencement of - Subject to the provisions contained in this Scheme, qualifying service of an employee shall commence from the date he takes charge of the post to which he is first appointed on regular basis.

16.

Counting of service on probation - Service on probation against a post in the Corporation or concerned Company if followed by confirmation in the same or another post shall qualify.

17.

Counting of period spent on leave - All leave during service in the Corporation or concerned Company, for which leave salary is payable shall count as qualifying service :

Provided that extra-ordinary leave on loss of pay granted on medical certificate or on account of employee's inability to join duty due to civil commotion, not exceeding twelve months during the entire service, shall also count as qualifying service.

18.

Broken period of service of less than one year - If the period of service of an employee includes broken period of service of less than one year, then, if such broken period is more than six months it shall be treated as one year and if such broken period is six months or less it shall be ignored.

19.

Counting of period spent on training - Period spent by an employee on training in the Corporation or a Company, as the case may be immediately before his appointment shall count as qualifying service.

20.

Counting of past service in the erstwhile insurer - Period of continuous service of a "transferred employee" with an insurer, shall qualify for pension:

Provided that such 'transferred employee” was not eligible for any pension, annuity, gratuity in lieu of pension or such other superannuation benefit in lieu of pension from the insurer in respect of the service with such insurer.

21.

Period of suspension - Period of suspension of an employee pending enquiry shall count for qualifying service where, on conclusion of such enquiry, he has been fully exonerated or the suspension is held to be wholly unjustified and in other cases, the period of suspension shall not count as qualifying service unless the competent authority passing the orders under General Insurance (Conduct, Discipline and Appeal) Rules framed by the Board of the Corporation or a Company in this behalf, expressly declares at that time that it shall count, to such extent as such authority may declare.

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22.

Forfeiture of service - Resignation or dismissal or removal or termination or compulsory retirement of an employee from the service of the Corporation or a Company shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits.

23.

Period of deputation to foreign service - An employee deputed on foreign service to the United Nations or any other foreign body or organisation may, at his option -

(a)

pay pension contribution in respect of his foreign service and count such service as qualifying service under this scheme; or

(b)

avail of the retirement benefits admissible under the rules of the foreign employer and not count such service as qualifying service under this scheme:

Provided that where an employee opts for sub-paragraph (b), retirement benefit shall be payable to him in India in rupees from such date and in such manner as the Corporation or the concerned Company, as the case may be may, by order, specify.

24.

Military Service - An employee who has rendered military service before appointment in the Corporation or the concerned Company shall continue to draw the military pension, if any, and the military service rendered by the employee shall not count as qualifying service for pension.

25.

Period of deputation to an organisation in India - Period of deputation of an employee to another organisation within India shall count as qualifying service: Provided the organisation to which he is deputed or the employee pays the pensionary contributions at the rates specified in sub-paragraph (1) of paragraph 7 of this scheme to the Corporation or the concerned Company.

26.

Addition to qualifying service in special circumstances - An employee shall be eligible to add to his service qualifying for superannuation pension (but not for any other class of pension) the actual period not exceeding one-fourth of the length of his service or the actual period by which his age at the time of recruitment exceeded twenty-eight years, or a period of five years, whichever is less, if the service or post to which the employee is appointed is one -

(a)

for which post-graduate research, or specialist qualification or experience in scientific, technological or professional fields, is essential; and

(b)

to which candidates of more than twenty-eight years of age are normally recruited, and

(c)

for which the candidate was given age relaxation over and above the maximum age limit fixed by the Corporation or the Company on account of his possessing higher qualification or experience:

Provided that this concession shall not be admissible to an employee unless his actual qualifying service at the time he quits the service in Corporation or a Company, as the case may be is not less than ten years:

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Provided further that this concession shall be admissible only if the recruitment procedure in respect of the said service or post contains a specific provision that the service or post is one which carries the benefit of this paragraph.

27.

Condonation of interruption in service -

(1)

In the absence of a specific indication to the contrary in the service records, an interruption between two spells of service in the Corporation or a Company, as the case may be rendered by an employee including service, counted in terms of the various provisions contained in this scheme shall be treated as automatically condoned and the pre-interruption service treated as qualifying service.

(2)

Nothing in sub-paragraph (1) shall apply to an interruption caused by the resignation or dismissal or removal or compulsory retirement or termination from service.

(3)

The period of interruption referred to in sub-paragraph (2) shall not count as qualifying service.

28.

Counting of service rendered on permanent part time basis in certain cases-

(1)

In the case of an employee, who immediately prior to his appointment on a whole-time basis was employed on a permanent part-time basis in the service of the Corporation or a Company and was contributing to the Provident Fund, such service rendered by him on permanent part-time basis shall be counted as qualifying service;

(2)

The length of qualifying service of the employee referred to in sub-paragraph (1) for the purpose of calculating the amount of pension shall be determined in accordance with Appendix II.

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CHAPTER - V CLASSES OF PENSION

29.

Superannuation Pension - Superannuation pension shall be granted to an employee who has retired on his attaining the age specified in paragraph 12 of General Insurance (Rationalisation and Revision of Pay Scales and Other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Scheme, 1974 and in paragraph 4 of General Insurance (Termination, Superannuation and Retirement of Officers and Development Staff) Scheme, 1976.

30.

Pension on voluntary retirement -

(1)

At any time after an employee has completed twenty years of qualifying service, he may, by giving notice of not less than ninety days, in writing to the appointing authority, retire from service :

Provided that this sub-paragraph shall not apply to an employee who is on deputation unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year:

Provided further that this sub-paragraph shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.

(2)

The notice of voluntary retirement given under sub-paragraph (1) shall require acceptance by the appointing authority:

Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.

(3)

(a)

An employee referred to in sub-paragraph (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than ninety days giving reasons therefor ;

(b)

on receipt of request under clause (a), the appointing authority may, subject to the provisions of sub-paragraph (2), consider such request for the curtailment of the period of notice of ninety days on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of ninety days on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of ninety days.

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(4)

An employee who has elected to retire under this paragraph and has given necessary notice to that effect to the appointing authority shall be precluded from withdrawing his notice except with the specific approval of such authority :

Provided that the request for such withdrawal shall be made before the intended date of his retirement.

(5)

The qualifying service of an employee retiring voluntarily under this paragraph shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty three years and it does not take him beyond the date of retirement.

(6)

The pension of an employee retiring under this paragraph shall be based on the average emoluments as defined under clause (d) of paragraph 2 of this scheme and the increase, not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension; Explanation.- For the purpose of this paragraph, the appointing authority shall be the appointing authority specified in Appendix-I to this scheme.

31.

Invalid Pension -

(1)

Invalid pension may be granted to an employee who -

(a)

has rendered minimum ten years of service ; and

(b)

retires from the service on account of any bodily or mental infirmity which permanently incapacitates him for the service;

(2)

An employee applying for an invalid pension shall submit a medical certificate of incapacity from a medical officer approved by the Corporation or a Company as the case may be;

32.

Compassionate Allowance -

(1)

An employee who is dismissed or removed or compulsorily retired or terminated from service shall forfeit his pension :

Provided that the authority competent to dismiss or remove or compulsorily retire or terminate him from service may, if -

(i)

such dismissal, removal, compulsory retirement or termination is on or after the 1st day of November, 1993 and

(ii)

the case is deserving a special consideration, sanction a compassionate allowance not exceeding two-thirds of pension which would have been admissible to him on the basis of qualifying service rendered upto the date of his dismissal, removal, compulsory retirement or termination.

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(2)

The compassionate allowance sanctioned under the proviso to sub-paragraph (1) shall not be less than the amount of minimum pension payable under paragraph 35 of this scheme.

33.

Payment of pension or family pension in respect of employees who retired or died between 1.1.1986 and 31.10.1993 -

(1)

Employees who have retired from the service of the Corporation or a Company, as the case may be, between the 1st day of January, 1986 and the 31st day of October, 1993 shall be eligible for pension with effect from the 1st day of November, 1993.

(2)

The family of a deceased employee governed by the provisions contained in sub-paragraph (7) of paragraph 3 shall be eligible for family pension with effect from 1st day of November, 1993.

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CHAPTER - VI RATE OF PENSION

34.

Amount of Pension -

(1)

In respect of employees who retired between the 1st day of January, 1986 but before the 31st day of July, 1987, basic pension and additional pension will be updated as per the formula given in Appendix-III.

(2)

In the case of an employee retiring in accordance with the provisions of the relevant rationalisation scheme after completing the qualifying service of not less than thirty three years, the amount of basic pension shall be calculated at fifty per cent of the average emoluments.

(3)

(a)

Additional pension shall be fifty per cent of the allowances drawn by an employee during the last ten months of his service.

(b)

No dearness relief shall be paid on the amount of additional pension.

Explanation:- For the purposes of this sub-paragraph "allowances" means allowances which are admissible to the extent counted for the following purpose only, namely :-

(i)

making contributions to the Provident Fund ;

(ii)

grant of house rent allowances ;

(iii)

payment of gratuity ; and

(iv)

re-fixation of salary on promotion.

(4)

Pension as computed being the aggregate of sub-paragraphs (2) and (3) above shall be subject to the minimum pension as specified in this scheme.

(5)

An employee who has commuted the admissible portion of his pension as per the provisions of paragraph 40 of this scheme shall receive only the balance of pension, monthly.

(6)

(a)

In the case of an employee retiring before completing a qualifying service of thirty- three years, but after completing a qualifying service of ten years, the amount of pension shall be proportionate to the amount of pension admissible under sub-paragraphs(2) and (3) and in no case the amount of pension shall be less than the amount of minimum pension specified in this scheme.

(b)

Notwithstanding anything contained in this scheme, the amount of invalid pension shall not be less than the ordinary rate of family pension which would have been payable to his family in the event of his death while in service.

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(7)

The amount of pension finally determined under this paragraph shall be expressed in whole rupee and where the pension contains a fraction of a rupee, it shall be rounded off to the next higher rupee.

*(8)

Notwithstanding anything contained in this Scheme, in relation to an employee covered by the proviso to clause (k) of Paragraph 2, pension shall be calculated in accordance with the provisions of sub-paragraph (2), so however, that such pension shall not be less than what he would have been entitled to had he continued in the scale of pay of General Manager, when the pension becomes due and payable to him.

35.

***Minimum Pension - The amount of minimum pension shall be -

(a)

rupees three hundred and seventy five per month in respect of an employee belonging to supervisory, clerical and subordinate cadre, who had retired or died before the 1st day of August, 1992 and in respect of Officer and Development Officer who had retired or died before 1st day of April, 1993;

(b)

rupees seven hundred and twenty per month in respect of an employee belonging to supervisory, clerical and subordinate cadre, who had retired or died on or after 1st day of August, 1992 and in respect of an Officer and Development Officer who had retired or died on or after 1st day of April, 1993;

#(c)

rupees 1,100/- per month in respect of an employee who has retired or died on or after the 1st day of August,1997;

(d)

in case of any wage revision in future the amount of minimum pension payable to an employee shall be determined by the Corporation corresponding to the index to which the scales will be linked" ;

36.

Dearness Relief -

(1)

Dearness Relief shall be granted on basic pension or family pension or invalid pension or on compassionate allowance in accordance with the rates specified in Appendix-IV.

(2)

The dearness relief shall also be allowed on the full basic pension even after commutation.

****

* Sub-paragraph (8) added vide S.O. 342(E) dated 22nd April, 1997. ** Sub-paragraph (c) added vide S.O. 342(E) dated 22nd April, 1997. *** paragraph substituted vide S.O.461 (E) dated 18th June, 1999 w.e.f. 1.11.1993. # Sub-clause (c) and (d) inserted vide S.O.590(E) dated 22.6.2000 w.e.f. 1.8.1997 @ In terms of clause (d) of Para 35, the minimum pension shall be Rs.1480/- p.m. as amended vide A.I. dated 8.2.2006 w.e.f. 1.8.2002. **** Vide A.I. dated 8.2.2006, Dearness Relief shall be payable to the employees who have retired and/or died on or after 1.8.2002, and to whom the Second Amendment Schemes, 2005, are applicable, on the revised basic pension for every rise or to be recoverable for every fall, as the case may be for every four points over 2328 points @ 0.18% of basic pension.

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37.

Determination of the period of ten months for average emoluments -

(1)

The period of the preceding ten months for the purpose of average emoluments shall be reckoned from the date of retirement.

(2)

In the case of voluntary retirement the period of preceding ten months for the purposes of average emoluments shall be reckoned from the date on which the employee voluntarily retires.

(3)

In the case of dismissal or removal or compulsory retirement or termination of service the period of preceding ten months for the purpose of average emoluments shall be reckoned from the date on which the employee is dismissed or removed or compulsorily retired or terminated by the Corporation or the Company.

(4)

If during the last ten months of the service, an employee had been absent from duty on extraordinary leave on loss of pay or had been under suspension and the period whereof does not count as service, the aforesaid period of the extraordinary leave or suspension shall not be taken into account in the calculation of the average emoluments and an equal period before the ten months shall be included.

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CHAPTER - VII FAMILY PENSION

38.

Family Pension -

(1)

Without prejudice to the provisions contained in this scheme where an employee dies -

(a)

after completion of one year of continuous service; or

(b)

before completion of one year of continuous service, provided the deceased employee concerned immediately prior to his appointment to the service or post was examined by the medical officer approved by the Corporation or the Company and declared fit for employment in the Corporation or such Company, as the case may be ; or

(c)

after retirement from service and was on the date of death in receipt of a pension, or compassionate allowance;

the family of the deceased shall be entitled to family pension, the amount of which shall be determined in accordance with the Appendix-V.

(2)

The amount of family pension shall be fixed at monthly rates and be expressed in whole rupees and where the family pension contains a fraction of a rupee, it shall be rounded off to the next higher rupee:

Provided that in no case a family pension in excess of the maximum prescribed under this scheme shall be allowed.

(3)

(a)

(i)

where an employee, who is not governed by the Workmen's Compensation Act, 1923(8 of 1923), dies while in service after having rendered not less than seven years continuous service, the rate of family pension payable to the family shall be equal to fifty per cent of the pay last drawn or twice the family pension admissible under sub-paragraph (1), whichever is less, and the amount so admissible shall be payable from the date following the date of death of the employee for a period of seven years, or for a period upto the date on which the deceased employee would have attained the age of sixty five years had he survived, whichever is less;

(ii)

In the event of death of an employee after retirement, the family pension as determined under clause (a) or clause (b) of this sub-paragraph shall be payable for a period of seven years, or for a period upto the date on which the retired deceased employee would have attained the age of sixty five years had he survived, whichever is less;

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(b)

(i)

Where an employee, who is governed by the Workmen's Compensation Act, 1923 (8 of 1923), dies while in service after having rendered not less than seven years continuous service, the rate of family pension payable to the family shall be equal to fifty per cent of the pay last drawn or one and half times the family pension admissible under sub-paragraph(1), whichever is less;

(ii)

the family pension so determined under sub-clause (i) shall be payable for the period mentioned in clause (a);

(c)

after the expiry of the period referred to in clause (a), the family, in receipt of family pension under that clause or clause (b) shall be entitled to family pension at the rate admissible under sub- paragraph (1).

(4)

Notwithstanding anything contained in this scheme, where the family of a deceased employee opts for pension in accordance with sub-paragraph (5) of paragraph 3 or is governed by the provisions contained in sub-paragraph (6) or (7) or (8) of paragraph 3 , such family of the deceased shall be eligible for family pension under this scheme.

39.

Period of payment of family pension -

(1)

The period for which family pension is payable shall be -

(a)

in the case of a widow or a widower, upto the date of death or remarriage, whichever is earlier;

(b)

in the case of a son, until he attains the age of twenty five years; and

(c)

in the case of an unmarried daughter, until she attains the age of twenty five years or until she gets married, whichever is earlier:

Provided that if the son or daughter of an employee is suffering from any disorder or disability of mind or is physically crippled or disabled so as to render him or he unable to earn a living even after attaining the age of twenty five years, the family pension shall be payable to such son or daughter for life subject to the following conditions, namely:-

(i)

if such son or daughter is one among two or more children of the employee, the family pension shall be initially payable to the minor children in the order set out in Clause (e) of sub-paragraph (1) until the last minor child attains the age of twenty-five years and thereafter the family pension shall be resumed in favour of the son or daughter suffering from disorder or disability of mind or who is physically crippled or disabled and shall be payable to him or her for life;

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(ii)

if there are more than one such children suffering from disorder or disability of mind or who are physically crippled or disabled, the family pension shall be paid in the order of their birth and the younger of them will get the family pension only after the elder next above him or her ceases to be eligible:

Provided that where the family pension is payable to such twin children it shall be paid in the manner set out in clause (f) of sub-paragraph (1);

(iii)

the family pension shall be paid to such son or daughter through the guardian as if he or she were a minor except in the case of a physically crippled son or daughter who has attained the age of majority;

(iv)

before allowing the family pension for life to any such son or daughter, the Competent Authority shall satisfy that the handicap is of such a nature as to prevent him or her from earning his or her livelihood and the same shall be evidenced by a certificate obtained from a medical officer approved by the Corporation or the Company, setting out, as far as possible, the exact mental or physical condition of the child;

(v)

the person receiving the family pension as guardian of such son or daughter or such a son or daughter not receiving the family pension through a guardian shall produce every three years a certificate from a medical officer approved by the Corporation or the concerned Company to the effect that he or she continues to suffer from disorder or disability of mind or continues to be physically crippled or disabled.

Explanation - The grant of family pension to disabled children beyond the age limit specified in this sub paragraph is subject to the following conditions, namely:-

(i)

A daughter shall become ineligible for family pension under this sub - paragraph from the date she gets married;

(ii)

The family pension payable to such son or daughter shall be stopped if he or she starts earning his or her livelihood. In such cases it shall be the duty of the guardian or son or daughter to furnish a certificate to the Corporation or the concerned Company as the case may be every month that-

(a)

he or she has not started earning his or her livelihood;

(b)

in case of daughter that she has not yet married;

(c)

if a deceased employee or pensioner leaves behind a widow or widower, the family pension shall become payable to the widow or widower, failing which to the eligible child;

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(d)

family pension to the children shall be payable in the order of their birth and the younger of them shall not be eligible for family pension unless the elder next above him or her has become ineligible for the grant of family pension:

Provided that where the family pension is be to twin children it shall be paid in the manner set out in clause (f) of sub - paragraph (1);

(e)

where the family pension is payable to twin children, it shall be paid to such children in equal shares:

Provided that where one such child ceases to be eligible, his or her share shall revert to the other child and where both of these cease to be eligible, the family pension shall be payable to the next eligible single child or twin children, as the case may be.

(2)

Where a deceased employee or a pensioner leaves behind more children than one, the eldest eligible child shall be entitled to the family pension for the period mentioned in clauses (b) and (c) of sub-paragraph (1) as the case may be, and after the expiry of that period the next child shall become eligible for the grant of the family pension.

(3)

Where family pension is granted under this paragraph to a minor, it shall be payable to the guardian on behalf of the minor.

(4)

In case both wife and husband are employees of the Corporation or the concerned Company and are governed by the provisions of this scheme and one of them dies while in service or after retirement, the family pension, in the case of the deceased shall be payable to the surviving husband or wife and in the event of death of the husband or wife, the surviving child or children shall be granted the two family pensions in respect of the deceased parents subject to the limits specified below, namely :-

(a)

If the surviving child or children is or are eligible to draw two family pensions at the rates mentioned in sub-clause (i) of clause (a) or sub- clause (i) of clause (b) of sub-paragraph (3) of paragraph 38, the amount of both pensions shall be limited to two thousand five hundred rupees only per mensem in respect of an employee who retired or died while in service prior to the 1st day of November 1993 and four thousand eight hundred rupees per mensem only in case of an employee who retired or died on or after the 1st day of November, 1993;

(b)

if one of the family pensions ceases to be payable at rates mentioned in sub-clause (i) of clause (a) or sub-clause (i) of clause (b) of sub- paragraph (3) of paragraph 38 and in lieu thereof the family pension at rate mentioned in sub- paragraph (1) of paragraph 38 becomes payable, the amount of both the pensions shall also be limited to two thousand five hundred rupees only per mensem in respect of employees who retired or died while in service prior to the 1st day of November, 1993 and four thousand eight hundred rupees per mensem in the case of employees who retired or died on or after the 1st day of November, 1993;

(c)

if both the family pensions are payable at the rate mentioned in sub-paragraph

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(1) of paragraph 38 the amount of the two pensions shall be limited to one thousand two hundred and fifty rupees per mensem in the case of employees who retired or died while in service prior to the 1st day of November, 1993 and two thousand four hundred rupees per mensem in respect of employees who retired or died on or after the 1st day of November, 1993;

*Note :

** In this sub-paragraph, for the figures and words “1st day of November, 1993”, the figures and words “1st day of August, 1992”, shall be substituted in respect of employees belonging to Supervisory, Clerical and Subordinate Staff cadre, who have retired or died on or after 1st day of August, 1992, and the figures and words “1st day of April, 1993” shall be substituted in respect of Officer and Development Officer who have retired or died on or after 1st day of April, 1993.

(5)

where the family pension is payable to more widows than one, the family pension shall be paid to the widows in equal shares;

(b)

on the death of a widow, her share of the family pension shall become payable to her eligible child:

Provided that if the widow is not survived by any child, her share of the family pension shall not lapse but shall be payable to the other widows in equal shares, or if there is only one such other widow, in full, to her;

(c)

where the deceased employee or pensioner is survived by a widow but has left behind eligible child or children from another wife who is not alive, the eligible child or children shall be entitled to the share of family pension which the mother would have received if she had been alive at the time of death of the employee or pensioner:

Provided that on the share or shares of family pension payable to such a child or children or to a widow or widows ceasing to be payable, such share or shares shall not lapse, but shall be payable to the other widow or widows or to the other child or children otherwise eligible, in equal shares, or if there is only one widow or child, in full, to such widow or child;

(d)

where the family pension is payable to twin children it shall be paid to such children in the manner specified in clause (f) of sub-paragraph (1) above.

(e)

except as provided in this sub-paragraph, the family pension shall not be payable to more than one member of the family at the same time.

(6)

Where a female employee or male employee dies leaving behind a judicially separated husband or widow and no child or children, the family pension in respect of the deceased shall be payable to the person surviving:

* Note added vide S.O. 342(E) dated 22nd April, 1997. ** paragraph substituted vide S.O.461 (E) dated 18th June, 1999 w.e.f. 1.11.1993.

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provided that where in case the judicial separation is granted on the ground of adultery and the death of the employee takes place during the period of such judicial separation, the family pension shall not be payable to the person surviving if such person surviving was held guilty of committing adultery.

(7)

(a)

where a female employee or male employee dies leaving behind a judicially separated husband or widow with a child or children, the family pension payable in respect of the deceased shall be payable to the surviving person provided he or she is the guardian of such child or children;

(b)

where the surviving person has ceased to be the guardian of such child or children, such family pension shall be payable to the person who is the actual guardian of such child or children.

(8)

If the son or unmarried daughter eligible for the grant of family pension, has attained the age of eighteen years, the family pension may be paid to such son or unmarried daughter directly.

(9)

(a)

if a person, who, in the event of death of a employee while in service, is eligible to receive family pension under this scheme, is charged with the offense of murdering the employee or for abetting in the commission of such an offense, the claim of such a person, including other eligible member or members of the family to receive the family pension, shall remain suspended till the conclusion of the criminal proceedings instituted against him;

(b)

if on the conclusion of the criminal proceedings referred to in (a) above, the person concerned- (i) is convicted for the murder or abetting in the murder of the employee, such a person shall be debarred from receiving the family pension which shall be payable to the other eligible member of the family, from the date of death of the employee; (ii) is acquitted of the charge of murder or abetting in the murder of the employee, the family pension shall be payable to such a person from the date of death of the employee;

(c)

the provisions of sub-clauses (a) and (b) above, shall also apply for the family pension becoming payable on the death of an employee after his retirement.

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CHAPTER - VIII COMMUTATION 40. Commutation -

(1)

An employee shall be entitled to commute for a lump sum payment a fraction not exceeding one-third of his pension.

Provided that in respect of an employee who is governed by sub-paragraph (5) of paragraph 3 of this scheme, the family of such employee shall also be entitled to commute for a lump sum payment, a fraction not exceeding one-third of the pension admissible to the employee.

(2)

An employee shall indicate the fraction of pension which he desires to commute and may either indicate the maximum limit of one-third pension or such lower limit as he may desire to commute.

(3)

If fraction of pension to be commuted results in fraction of rupee, such fraction of a rupee shall be ignored for the purpose of commutation.

(4)

The lump sum payable to an applicant shall be calculated in accordance with the Table given below:-

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TABLE Commutation Values for a pension of Re. one per annum

Age next birthday

Commutation value expressed as number of year’s purchase

Age next birthday

Commutation value expressed as number of year’s purchase

19.28

12.95

19.20

12.66

19.11

12.35

19.01

12.05

18.91

11.73

18.81

11.42

18.70

11.10

18.59

10.78

18.47

10.46

18.34

10.13

18.21

9.81

18.07

9.48

17.93

9.15

17.78

8.82

17.62

8.50

17.46

8.17

17.29

7.85

17.11

7.53

16.92

7.22

16.72

6.91

16.52

6.60

16.31

6.30

16.09

6.01

15.87

5.72

15.64

5.44

15.40

5.17

15.15

4.90

14.90

4.65

14.64

4.40

14.37

4.17

14.10

3.94

13.82

3.72

13.54

3.52

13.25

3.32

3.13

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Notes:

(1)

The Table above indicates the commuted value of pension expressed as number of year's purchase with reference to the age of the pensioner as on his next birthday. The commuted value in the case of an employee retiring at the age of fifty-eight years is 10.46 year's purchase and, therefore, if he commutes rupees one hundred from his pension within one year of retirement, the lump sum amount payable to him works out to Rs.100 X 10.46 X 12 = Rs.12,552.

(2)

An employee who had commuted the admissible portion of pension is entitled, to have the commuted portion of pension restored after the expiry of a period of fifteen years from the date of commutation;

(3)

An applicant who is authorised a superannuation pension, voluntary retirement pension, invalid pension or Compassionate Allowance shall be eligible to commute a fraction of his pension under this scheme;

(4)

In the case of a pensioner eligible for superannuation pension or pension on voluntary retirement, no medical examination shall be necessary, if the application for commutation is made within one year from the date of retirement. However, if such a pensioner applies for commutation of pension after one year from the date of his retirement, the same will be permitted subject to medical examination.

Explanation –

An applicant who –

(i)

retires on invalid pension under paragraph 31 of this scheme, or

(ii)

is in receipt of compassionate allowance under paragraph 32 of this scheme,

shall be eligible to commute a fraction of his pension subject to the limit specified in sub-paragraph (1) after he has been declared fit by the medical officer approved by the Corporation or the Company concerned.

(5)

The commutation of pension shall become absolute in the case of an employee -

(a)

retiring on superannuation or voluntary retirement who submits an application for commutation of pension before the date of retirement, on the date following the date of retirement:

Provided that the employee governed by sub-paragraph (3) of paragraph 30 shall not apply for commutation of a part of his pension before the expiry of the notice of ninety days and the commutation of pension shall become absolute only on the expiry of the period of the notice referred to in sub-paragraph (1) of the paragraph 30;

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(b)

retiring on Superannuation or on voluntary retirement, if he applies for commutation of pension after the date of retirement but before completion of one year from the date of retirement, on the date the application for commutation is received by the competent authority;

(c)

retiring on superannuation or on voluntary retirement, if he applies for commutation of pension after one year from the date of retirement, on the date of the medical certificate given by a medical officer approved by the Corporation or a Company concerned;

(d)

who has retired prior to the 1st day of November, 1993 and who opts to be governed by this scheme, on the 1st day of November, 1993, where the application for commutation is made within the period specified by clause (b) of Sub-paragraph (1) of paragraph 3;

(e)

who was in the service of the Corporation or a Company on or after the 1st day of November, 1993 but who retired prior to the publication of this scheme, on the day immediately following the date of his retirement , where the application is made within the period;

specified by clause (b) of sub-paragraph (2) of paragraph 3;

(f)

who retired on or after the 1st day of November,1993 but died prior to the notified date, on the day immediately following the date of his retirement where the application for commutation is made by the family of the deceased within the period specified by clause (a) of sub-paragraph (5) of paragraph 3;

(g)

in respect of whom invalid pension under paragraph 31 or compassionate allowance under paragraph 32 is admissible, commutation shall become absolute on the date of the medical certificate given by the medical officer approved by the Corporation or Company concerned.

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CHAPTER - IX GENERAL CONDITIONS

41.

Pension subject to future good conduct – Future good conduct shall be an implied condition of every grant of pension and its continuance under this scheme.

42.

Withholding or withdrawal of Pension – The competent authority may by order in writing, withhold or withdraw pension or a part thereof, whether permanently or for a specified period, if the pensioner is convicted of a serious crime or is found guilty of grave misconduct:

Provided that where a part of pension is withheld or withdrawn, the amount of such pension shall not be reduced below the minimum pension per mensem payable under this scheme.

43.

Conviction by Court – Where a pensioner is convicted of a serious crime by a Court of Law, action shall be taken in the light of the judgment of the court relating to such conviction.

44.

Pensioner guilty of grave misconduct – In a case not falling under paragraph 43 if the Competent Authority considers that the pensioner is prima facie guilty of grave misconduct, it shall, before passing an order , follow the procedure specified in the General Insurance (Conduct, Discipline and Appeal) Rules framed by the Board of the Corporation or of the Company.

45.

Provisional pension –

(1)

An employee who has retired on attaining the age of superannuation or otherwise and against whom any departmental or judicial proceedings are instituted or where departmental proceedings are continued, a provisional pension equal to the maximum pension which would have been admissible to him, would be allowed subject to adjustment against final retirement benefits sanctioned to him, upon conclusion of the proceedings but no recovery shall be made where the pension finally sanctioned is less than the provisional pension or the pension is reduced or withheld etc., either permanently or for a specified period.

(2)

In such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the proceedings. Any recoveries to be made from an employee shall be adjusted against the amount of gratuity payable.

Explanation – In this chapter,

(a)

the expression 'serious crime' includes a crime involving an offense under the Official Secrets Act, 1923 (19 of 1923);

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(b)

The expression "grave misconduct" includes the communication or disclosure of any secret, official code or password or any sketch, plan, model, article, note, document or information such as is mentioned in section 5 of the Official Secrets Act, 1923 (19 of 1923) (which was obtained while holding office in the Corporation or the Company concerned) so as to prejudicially affect the interests of the general public or the security of the State.

46.

Commutation of pension during departmental or judicial proceedings – An employee, against whom the departmental or judicial proceedings have been instituted before the date of his retirement or a person against whom such proceedings are instituted after the date of his retirement, shall not be eligible to commute a fraction of his provisional pension or pension, as the case may be, authorised under this scheme, during the pendency of such proceedings

47.

Recovery of Pecuniary loss caused to the Corporation or a Company –

(1)

The Competent Authority may withhold or withdraw a pension or a part thereof, whether permanently or for a specified period, and order recovery from pension of the whole or part of any pecuniary loss caused to the Corporation or a Company if in any departmental or judicial proceedings the pensioner is found guilty of grave misconduct or negligence during the period of his service :

Provided that the Board of the Corporation or a Company shall be consulted before any final orders are passed:

Provided further that departmental proceedings, if instituted while the employee was in service, shall, after the retirement of the employee, be deemed to be proceedings under this paragraph and shall be continued and concluded by the authority by which they were commenced in the same manner as if the employee had continued in service:

Provided also that no departmental or judicial proceedings, if not initiated while the employee was in service, shall be instituted in respect of a cause of action which arose or in respect of an event which took place more than four years before such institution.

(2)

Where the competent authority orders recovery of the pecuniary loss from the pension the recovery shall not ordinarily be made at a rate exceeding one-third of pension admissible on the date of retirement of the employee:

Provided that where a part of pension is withheld or withdrawn, the amount of pension drawn by a pensioner shall not be less than the minimum pension payable under this scheme.

48.

Recovery of dues of the Corporation or a Company – The Corporation or a Company shall be entitled to recover the dues to the Corporation or a Company on account of housing loans, advances, license fee, other recoveries and recoveries due to employees' co-operative credit Societies from the commutation value of the pension or the pension or the family pension.

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49.

* Commercial employment after retirement –

(1)

If a pensioner who, immediately before his retirement was holding the post of Deputy Manager or above and wishes to accept any commercial employment before the expiry of two years from the date of his retirement, he shall obtain the previous sanction of competent authority, to such acceptance:

Provided that an employee who was permitted by competent authority to take up a particular form of commercial employment during his leave preparatory to retirement or during refused leave shall not be required to obtain subsequent permission for his continuance in such employment after retirement.

(2)

Subject to the provisions of sub-paragraph (3), competent authority, may by order in writing, on the application by a pensioner, grant, subject to such conditions, if any, as it may deem necessary, permission, or refuse, for reasons to be recorded in the order, permission to such pensioner to take up the commercial employment specified in the application.

(3)

In granting or refusing permission under sub-paragraph (2) to a pensioner for taking up any commercial employment, competent authority shall have regard to the following factors, namely:-

(a)

the nature of the employment proposed to be taken up and the antecedents of the employer;

(b)

whether his duties in the employment which he proposes to take up might be such as to bring him into conflict with the Corporation or a Company as the case may be;

(c)

whether the pensioner while in service had any such dealing with the employer under whom he proposes to seek employment as it might afford a reasonable basis for the suspicion that such pensioner had shown favours to such employer;

(d)

whether the duties of the commercial employment proposed involve liaison or contact work with the Corporation or a Company as the case may be;

(e)

whether his commercial duties will be such that his previous official position or knowledge or experience under the Corporation or a Company as the case may be could be used to give the proposed employer an unfair advantage;

(f)

the emoluments offered by the proposed employer; and

(g)

any other relevant factor.

* in paragraph 49, the words “the Corporation or a Company, as the case may be” are replaced at certain places by the words “competent authority” vide S.O. 1086(E) dated 2nd November, 2001.

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(4)

Where within a period of sixty days of the date of receipt of an application under sub-paragraph (3), competent authority does not refuse; to grant the permission applied for or does not communicate the refusal to the applicant, competent authority shall be deemed to have granted the permission applied for :

Provided that in any case where defective or insufficient information is furnished by the applicant and it becomes necessary for competent authority to seek further clarifications or information from him, the period of sixty days shall be counted from the date on which the defects have been removed or complete information has been furnished by the applicant.

(5)

Where competent authority grants the permission applied for subject to any conditions or refuses such permission, the applicant may, within thirty days of the receipt of the order of competent authority to that effect, make a representation against any such condition or refusal and competent authority may make such orders thereon as it deems fit:

Provided that no order other than an order cancelling such condition or granting such permission without any conditions shall be made under this sub-paragraph without giving the pensioner making the representation an opportunity to show cause against the order proposed to be made.

(6)

If any pensioner takes up any commercial employment at any time before the expiry of two years from the date of his retirement without the prior permission of competent authority, or commits a breach of any condition subject to which permission to take up any commercial employment has been granted to him under this paragraph, it shall be competent for competent authority to declare by order in writing and for reasons to be recorded therein that he shall not be entitiled to the whole or such part of the pension and for such periods as may be specified in the order:

Provided that no such order shall be made without giving the pensioner concerned an opportunity of showing case against such declaration:

Provided further that in making any order under this sub-paragraph, competent authority shall have regard to the following factors, namely:-

(i)

the financial circumstances of the pensioner concerned;

(ii)

the nature of, and the emoluments from, the commercial employment taken up by the pensioner concerned; and

(iii)

any other relevant factor.

(7)

Every order passed by competent authority under this paragraph shall be communicated to the pensioner concerned.

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(8)

In this paragraph,

(a)

the expression "commercial employment" means –

(i)

an employment in any capacity including that of an agent, under a company, co-operative society, firm or individual engaged in trading, commercial, industrial, financial or professional business and includes also a directorship of such company and partnership of such firm, but does not include employment under a body corporate, wholly or substantially owned or controlled by the Central Government or a State Government;

(ii)

setting up practice, either independently or as a partner of a firm, as adviser or consultant in matters in respect of which the pensioner –

(A)

has no professional qualifications and the matters in respect of which the practice is to be set up or is carried on are relatable to his official knowledge or experience, or

(B)

has professional qualifications but the matters in respect of which such practice is to be set up are such as are likely to give his clients an unfair advantage by reason of his previous official position, or

(C)

has to undertake work involving liaison or contact with the offices or officers of the Corporation or a company as the case may be.

Explanation –

For the purpose of this clause, the expression "employment under a co-operative society" includes the holding of any office, whether elective or otherwise, such as that of President, Chairman, Manager, Secretary, Treasurer and the like, by whatever name called in such society.

50.

Nomination –

(1)

The trust shall allow every employee governed by this scheme to make a nomination conferring on one or more persons the right to receive the amount of pensionary benefits under this scheme in the event of his death before that amount becomes payable or, having become payable, has not been paid. Such nomination shall be made in such form as may be specified by the Corporation or the Company, as the case may be from time to time.

(2)

If any employee nominates more than one person under sub-paragraph (1), he shall, in his nomination, specify the amount or share payable to each of the nominees in such a manner as to cover the whole of the amount of the pensionary benefits that may be payable in the event of his death.

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(3)

A nomination made by an employee may, at any time, be modified or revoked by him after giving a written notice to the trustees of his intention of doing so in such form as the Corporation or the Company, as the case may be, may from time to time specify.

(4)

A nomination or its revocation or its modification shall take effect to the extent it is valid on the date on which it is received by the trust.

51.

Date from which pension becomes payable –

(1)

Except in the case of an employee to whom the provisions of paragraph 42 and paragraph 45 apply a pension other than family pension shall become payable from the date following the date on which an employee retires.

(2)

Family pension shall become payable from the date following the date of death of the employee or the pensioner.

(3)

Pension including family pension shall be payable for the day on which its recipient dies.

52.

Currency in which pension is payable – All pensions admissible under this scheme shall be payable in rupees in India only.

53.

Manner of payment of pension – A pension fixed at a monthly rate shall be payable monthly on or after the first day of the following month.

54.

Power to issue instructions – The ***Chairman-cum-Managing Director of the Corporation or the concerned Company, may from time to time issue instructions as may be considered necessary or expedient for the implementation of this scheme.

*54A.

Power to Relax –

Where the Central Government is satisfied that the operation of any of the para of the Scheme causes undue hardship in respect of any class or categories of persons, it may, by order for reasons to be recorded in writing relax the requirement of the provision of that para in a manner not inconsistent with this Scheme.

** “54B.

Pensionary benefits to employee mentioned in proviso to clause (k) of paragraph 2 who was in service on or after 1.1.1996 –

Notwithstanding anything contained in this Scheme, in respect of employee covered by the proviso to clause (k) of paragraph 2, who was in service on or after 1st January, 1996, the pensionary benefits shall be calculated in accordance with the provisions contained in the Central Civil Services (Pension) Rules, 1972 and the Central Civil Services (Commutation of Pension Rules, 1981), as applicable to Central Government servants and in accordance with the instructions issued by the Central Government thereunder from time to time.

* inserted vide S.O 1121(E) dated 6th December, 1999 w.e.f. 6.12.1999. **inserted vide S.O.775 (E) dated 13th August, 2001 w.e.f. 1.1.1996. *** The words “Chairman and Managing Director or Chairman-cum-Managing Director” replaced with “Chairman-cum-Managing Director” vide S.O.634(E) dated 4.5.2005 w.e.f. 1.2.2005.

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Provided that where such an employee, who has retired on or after 1.1.1996 and before the date of publication of this Scheme in the Gazette or the family of such employee in the event of death of such employee gives a notice in writing within 90 days of the publication of this Scheme, expressing an option not be governed by the provisions of this paragraph, then, the provisions of the above paragraph shall not apply in respect of such employee or the family of such employee, as the case may be. Option once exercised under this proviso shall be final.

55.

Residuary provisions – Matters relating to pension and other benefits in respect of which no express provision has been made in this scheme shall be governed by the corresponding provisions contained in the Central Civil Services (Pension) Rules, 1972 or the Central Civil Services (Commutation of Pension) Rules,1981, applicable for Central Government employees.

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APPENDIX - I (See Explanation in paragraph 30)

Category of employees

Appointing Authority

*i)

**Chairman-cum-Managing Director of the Corporation and Chairman-cum-Managing Director of the Company

Central Government

ii)

General Manager, Assistant General Manager and equivalent cadres

**Chairman-cum-Managing Director of the Corporation

iii)

Manager, Deputy Manager and equivalent cadres

General Manager

iv)

Assistant Manager, Administrative Officer, Asstt. Admn. Officer and equivalent cadres

Assistant General Manager

Development Officers

Manager

vi)

Senior Assistant, Stenographer and equivalent cadres

Manager

vii)

Assistant and equivalent cadres

Deputy Manager

viii)

Subordinate Staff and equivalent cadres

Assistant Manager

* Sub-item (I) to (vii) renumbered as sub-item (ii) to (viii) and sub-item (I) inserted vide S.O. 475(E) dated 3rd July, 1996. ** The words “Chairman and Managing Director or Chairman-cum-Managing Director” replaced with “Chairman-cum-Managing Director” vide S.O.634(E) dated 4.5.2005 w.e.f. 1.2.2005.

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APPENDIX II ( See paragraph 28 )

Actual service rendered on Permanent Part-time basis.

Length of corresponding qualifying service for each year of service rendered on permanent part time basis for calculating the amount of pension

(1)

(2)

Less than 3 hours;

1/4th of a year

3 hours or more but less than 4 hours;

3/8th of a year

4 hours or more but less than 5 hours;

½ of a year

5 hours or more but less than 6 hours;

5/8th of a year

6 hours or more but less than 7 hours;

3/4th of a year

7 hours or more but less than 8 hours;

7/8th of a year

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Appendix - III (see paragraph 34 ) The formula of updating basic pension and additional pension in respect of employees who retired between the 1st day of January 1986 and the 31st day of July, 1987 shall be as under:-

(1)

Basic pension shall be increased by an amount of –

(a)

50 per cent of first Rs.1000 of the average emoluments reckonable for pension

Rs.__________

(b)

45 per cent of next Rs.500

Rs.__________

(c)

40 per cent of the average emoluments reckonable for pension exceeding Rs.1500

Rs.__________

Total of (a + b + c)

Rs.__________ (A)

50 per cent of the average monthly emoluments for the last 10 months in service prior to retirement.

Rs.__________ (B)

Dearness relief at index number 600

Rs.__________ (C)

in the All India Average Consumer Price Index for Industrial Workers in the series 1960=100, on basic pension calculated at (1) above, as per Table given below.

Total increased basic pension

= (B) + (C) x

number of years qualifying service (Max. 33 years)

Rs.__________ (D)

Basic pension as on 1.11.1993 (rounded off to the next higher rupee)

Rs.__________ (E)

(2)

For increase in the additional pension, amount of special allowances counted for making contributions to Provident Fund will be increased with reference to the quantum of special allowances ranking for Provident Fund as per the relevant Rationalisation Scheme.

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TABLE Rates of dearness relief worked out at index no. 600 in the All India Average Consumer Price Index for Industrial Workers in the series 1960=100 for all classes of employees who retired during the period 1.1.1986 to 31.07.1987:

(a) Subordinate staff

80.40 per cent of pension calculated at (1) above

(b) Supervisory and clerical staff drawing pension upto Rs.757/- per month

67 per cent of pension calculated at (1) above

(c) Supervisory and clerical staff drawing pension of Rs.757/- per month and above will be eligible for dearness relief as under :-

Amount of basic pension drawn p.m.

The amount of dearness relief admissible

(Rs.)

757 to 796

508.00

797 to 804

534.00

805 to 824

540.00

825 to 844

553.00

845 to 864

567.00

865 to 884

580.00

885 to 904

593.00

905 to 924

607.00

925 to 944

620.00

945 to 964

634.00

965 to 984

647.00

985 to 1004

660.00

1025 to 1044

687.00

1045 to 1064

701.00

1065 to 1084

714.00

1085 and above

727.00

(d) Officers and Development Staff shall be eligible for dearness relief as under :

For those drawing basic pension upto Rs.765 per month;

66 per cent of the amount of pension calculated as at (1) above subject to a maximum of Rs. 500/-

For those drawing basic pension from Rs.766 to Rs.1165 per month;

Rs. 500.

For those drawing basic pension of Rs.1166 per month or above;

42.90 per cent of the amount of pension calculated as at (1) above subject to a maximum of Rs. 715

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Appendix-IV (See paragraph 36) Dearness relief on basic pension shall be as under :-

(1)

In the case of employees who retired on or after the 1st day of January, 1986, but before the 1st day of November, 1993, dearness relief shall be payable for every rise or be recoverable for every fall, as the case may be, of every 4 points over 600 points in the quarterly average of the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. Such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below :-

Scale of basic pension per month

The rate of dearness relief as a percentage of basic pension

(1)

(2)

(i)

upto Rs. 1250

0.67 per cent.

(ii)

Rs. 1251 to Rs. 2,000

0.67 per cent of Rs.1250 plus 0.55 percent of basic pension in excess of Rs.1250.

(iii)

Rs. 2001 to Rs. 2130

0.67 per cent of Rs.1250 plus 0.55 percent of the difference between Rs.2000 and Rs.1250 plus 0.33 per cent of basic pension in excess of Rs.2000.

(iv)

above Rs. 2130

0.67 per cent of Rs.1250 plus 0.55 percent of the difference between Rs.2000 and Rs.1250 plus 0.33 per cent of the difference between Rs.2130 and Rs.2000 plus 0.17 per cent of basic pension in excess of Rs.2130.

(2)

In the case of employees who retire on or after the 1st day of November, 1993, dearness relief shall be payable for every rise or be recoverable for every fall, as the case may be, of every 4 points over 1148 the series 1960 = 100. Such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below :-

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Scale of basic pension per month

The rate of dearness relief as a percentage of basic pension

(1)

(2)

(i)

upto Rs. 2,400

0.35 per cent.

(ii)

Rs. 2,401 to Rs. 3,850

0.35 per cent of Rs.2,400 plus 0.29 per cent of basic pension in excess of Rs.2,400

(iii)

Rs. 3,851 to Rs. 4,100

0.35 per cent of Rs . 2,400 plus 0.29 per cent of the difference between Rs. 3,850 and Rs.2,400 plus 0.17 per cent of basic pension in excess of Rs. 3,850.

(iv)

above Rs. 4,100

0.35 per cent of Rs.2,400 plus 0.29 per cent of the difference between Rs.3,850 and Rs.2,400 plus 0.17 per cent of the difference between Rs.4,100 and Rs.3,850 plus 0.09 per cent of basic pension in excess of Rs. 4,100.

*(3)

** Notwithstanding anything contained in sub-paragraph (1) and sub-paragraph (2) in respect of employees belonging to Supervisory, Clerical and Subordinate cadre who have retired on or after the 1st day of August, 1992 and in respect of Officer and Development Officer, retired on or after 1st day of April, 1993, dearness relief shall be payable or be recoverable as may be determined from time to time.

#(3A)

In the case of employees who have retired or died on or after the 1st day of August,1997, the dearness relief shall be payable for every rise or be recoverable for every fall, as the case may be, of every four points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers in the series 1960=100. Such increase or decrease in dearness relief for every said four points shall be at the rate of 0.23 per cent of basic pension.

#(3B)

In case of any wage revision in future the rate of dearness relief payable to an employee shall be determined by the Corporation corresponding to the index to which the scales will be linked ;

* Sub-paragraph (3) inserted and sub-paragraph (3), (4), (5), (6) renumbered as (4), (5), (6) & (7) vide S.O.342(E) dated 22nd April, 1997. ** paragraph substituted vide S.O.461 (E) dated 18th June, 1999 w.e.f. 1.11.1993. # Sub-paragraph (3A) and (3B) inserted vide S.O.590(E) dated 22.6.2000 w.e.f. 1.8.1997.

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(4)

Dearness relief shall be payable for the half year commencing from the 1st day of February and ending with 31st day of July on the quarterly average of the index figures published for the months of October, November and December of the previous year and for the half year commencing from the 1st day of August and ending with the 31st day of January on the quarterly average of the index figures published for the months of April, May and June of the same year.

(5)

In the case of family pension, invalid pension and compassionate allowance, dearness relief shall be payable in accordance with the rates mentioned above.

(6)

Dearness relief will be allowed on full basic pension even after commutation.

(7)

Dearness relief is not payable on additional pension.

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Appendix - V (see paragraph 38) The ordinary rates of family pension shall be as under : (a) In respect of employees retired before 1.11.1993

Scale of pay per month

Amount of monthly family pension

(1)

(2)

Upto Rs.1500

30 per cent of the 'pay' shall be the basic family pension plus 30 per cent of allowances which are counted for making contributions to Provident Fund but not or dearness allowance shall be additional family pension. The aggregate of basic and additional family pension shall not be less than Rs.375 per month.

Rs.1501 to Rs.3000

20 per cent of the 'pay' shall be the basic family pension plus 20 per cent of allowances which are counted for making contributions to Provident Fund but not for dearness allowance shall be the family pension. The aggregate of basic and additional family pension shall not be less than Rs.450 per month.

Above Rs.3000

15 per cent of the 'pay' shall be the basic family pension plus 15 per cent. of allowances which are counted for making contributions to Provident Fund but not or dearness allowance shall be the additional family pension. The aggregate of basic and additional family pension shall not be less than Rs.600 per month and more than Rs.1250 per month.

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(b) In respect of employees retired or retiring on or after 1.11.1993

Scale of pay per month

Amount of monthly family pension

(1)

(2)

Upto Rs.2870

30 per cent of the 'pay' shall be the basic family pension plus 30 per cent of the allowances which are counted for making contributions to Provident Fund but not for dearness allowance shall be the additional family pension. The aggregate of basic and additional family pension shall be subject to a minimum of Rs.720 per month.

Rs.2871 to Rs.5740

20 per cent of the 'pay' shall be the basic family pension plus 20 per cent of the allowances which are counted for making contributions to Provident Fund but not for dearness allowance shall be the additional family pension. The aggregate of basic and additional family pension shall be subject to a minimum of Rs.860 per month.

Above Rs.5740

15 per cent of the 'pay' shall be the basic family pension plus 15 per cent of the allowances which are counted for making contributions to Provident Fund but not for dearness allowance shall be the additional family pension. The aggregate of basic and additional family pension hall be subject to a minimum Rs. 1150 per month and a maximum of Rs.2400 per month.

*(c)

**Notwithstanding anything contained in paragraph (a) or paragraph (b), in respect of employees belonging to Supervisory, Clerical and Subordinate cadre who have retired on or after the 1st day of August, 1992 or in respect of Officer and Development Officer, who have retired on or after 1st April, 1993, the ordinary rates of family pension shall be calculated as per the rates prescribed in paragraph (b) above.

* Para (c) added vide S.O.342(E) dated 22nd April, 1997. ** paragraph substituted vide S.O.461 dated 18th June, 1999 w.e.f. 1.11.1993.

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#(d) In respect of employees retired on or after 1st day of August,1997, the rate of ordinary family pension shall be as under:

Scale of pay per month

Amount of monthly family pension

(1)

(2)

Upto Rs.4360

30 per cent of the 'pay' shall be the basic family pension plus 30 per cent of the allowances which are counted for making contributions to provident fund but not for dearness allowance shall be the additional pension. The aggregate of basic and additional family pension shall be subject to minimum of Rs.1,100/- per month

Rs.4361 to Rs.8700/-

20 per cent of the 'pay' shall be the basic family pension plus 20 per cent of the allowances which are counted for making contributions to provident fund but not for dearness allowance shall be the additional pension. The aggregate of basic and additional family pension shall be subject to minimum of Rs.1,310/- per month

Rs.8701 and above

15 per cent of the 'pay' shall be the basic family pension plus 15 per cent of the allowances which are counted for making contributions to provident fund but not for dearness allowance shall be the additional pension. The aggregate of basic and additional family pension shall be subject to minimum of Rs.1,740/- per month

#(e) In case of any wage revision in future the rate of ordinary family pension payable to an employee shall be determined by the Corporation corresponding to the index to which the scales will be linked. # paragraph (d) and (e) inserted vide S.O.590 dt 22.6.2000 w.e.f. 1.8.1997.

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Notes:

(1)

Dearness relief is not payable on additional family pension.

(2)

"Scale of pay" for the purpose of calculation of family pension as above shall be aggregate of "pay" as defined in sub-clause (p) of paragraph 2 and "allowances" as defined in the explanation to sub paragraph (3) of paragraph 34.

In terms of clause (e), the rate of ordinary family pension are amended vide A.I. dated 8.2.2006, in respect of employees retired and/or died on or after 1.8.2002, as under :-

Scale of Pay

Amount of Family Pension

Upto Rs.5840/-

30% of the “Pay” shall be the basic family pension plus 30% of the allowances which are counted for making contributions to Provident Fund but not for dearness allowance shall be the additional family pension. The aggregate of basic and additional family pension shall be subject to a minimum of Rs.1480/- p.m.

Rs.5841/- to Rs.11640/-

20% of the “Pay” shall be the basic family pension plus 20% of the allowances which are counted for making contributions to Provident Fund but not for dearness allowance shall be the additional family pension. The aggregate of basic and additional family pension shall be subject to a minimu m of Rs.1760/- p.m.

Rs.11641/- and above

15% of the “Pay” shall be the basic family pension plus 15% of the allowances which are counted for making contributions to Provident Fund but not for dearness allowance shall be the additional family pension. The aggregate of basic and additional family pension shall be subject to a minimum of Rs.2330/- p.m.

NOTES:- (1) Dearness Relief is not payable on additional family pension. (2) If the surviving child or children are eligible to draw two family pension, both pensions shall be limited to Rs.10,830/- in respect of employees who have retired or died while in service, on or after 1.8.2002. F.No.2(4)/Ins.III/94-(ii) -- s/d -- Joint Secretary (Insurance)

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Explanatory Memorandum Employees in GIC are governed by the General Insurance (Employees‟) Pension Scheme, 1995 notified in the Gazette by the Central Government vide S.O. No. 585(E) dated 28.6.1995. In terms of the provisions of the said Scheme, employees recruited in GIC on or after 28.6.1995 are governed by the provisions of the said Pension Scheme. The Ministry of Finance vide its O.M. No.1(13)/EV/2001 dated 13.11.2003 introduced a new Pension Scheme based on defined contributions for new entrants recruited in Central Government service on or after 1.1.2004 and further vide O.M. No.1(13)/EV/2001 dated 15.3.2004, it was clarified that all new entrants joining any autonomous body/PSU under the administrative control of different Ministries/Departments on or after 1.1.2004 will compulsorily be covered by the New Pension Scheme. Accordingly, the provisions of General Insurance (Employees‟) Pension Scheme, 1995 are amended enabling the employees joining Corporation/Company on or after 1.1.2004 to be covered under the New Pension Scheme. It is certified that no employee of the Corporation or of the concerned Company is likely to be affected adversely by the introduction of the New Pension Scheme with retrospective effect. FOOT NOTE :- The Principal Scheme was published vide Notification No.S.O.585(E) dated 28th June,1995 and subsequently amended by notification No.

1. S.O. 475(E) dated 3rd July, 1996

2. S.O. 342(E) dated 22nd April, 1997

3. S.O. 461(E) dated 18th June 1999 and

4. S.O. 1221(E) dated 6th December,1999

5. S.O. 590(E) dated 22nd June, 2000

6. S.O. 775(E) dated 14th August, 2001

7. S.O. 1086 (E) dated 2nd November, 2001

8. S.O. 778(E) dated 5th July, 2004

9. S.O. 636(E) dated 4th May, 2005

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

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GENERAL INSURANCE (EMPLOYEES’) PENSION SCHEME, 1995 CONTENTS

Paragraph No.

Sub-heading

Page No.

CHAPTER I (PRELIMINARY)

Short Title and Commencement

Definitions

CHAPTER II (APPLICATION AND ELIGIBILITY)

Application

Option to subscribe to the Provident Fund

CHAPTER III (FUND)

Constitution of the fund

Liability of the Provident Fund Trust

Composition of the Fund

Board of Trustees

Trustees of Carry out the directions of the Corporation or a Company

10.

Books of Accounts of the Fund

11.

Actuarial investigation of the Fund

12.

Investment of Fund

13.

Payments out of the Fund

CHAPTER IV (QUALIFYING SERVICE)

14.

Qualifying Service

15.

Commencement of qualifying service

16.

Counting of service on probation

17.

Counting of period spend on leave

18.

Broken period of service of less than one year

19.

Counting of period spend on training

20.

Counting of past service in the erstwhile insurer

21.

Period of suspension

22.

Forfeiture of service

23.

Period of deputation to foreign service

24.

Military Service

25.

Period of deputation to an organisation in India

26.

Addition to qualifying service in special circumstances

27.

Condonation of interruption in service

28.

Counting of service rendered on a permanent part-time basis in certain cases

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

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CHAPTER V (CLASSES OF PENSION)

29.

Superannuation Pension

30.

Pension on Voluntary Retirement

31.

Invalid Pension

32.

Compassionate Allowance

33.

Payment of pension or family pension in respect of part-time employees who retired or died between 23.3.1988 to 31.10.1993

CHAPTER VI (RATE OF PENSION)

34.

Amount of Pension

35.

Minimum Pension

36.

Dearness Relief

37.

Determination of the period of ten months for average emoluments

CHAPTER VII (FAMILY PENSION)

38.

Family Pension

39.

Period of payment of Family Pension

CHAPTER VIII (COMMUTATION)

40.

Commutation

CHAPTER IX (GENERAL CONDITIONS)

41.

Pension subject to future good conduct

42.

Withholding or withdrawal of Pension

43.

Conviction of Court

44.

Pensioner Guilty of grave misconduct

45.

Provisional Pension

46.

Commutation of pension during departmental or judicial proceedings

47.

Recovery of pecuniary loss caused to the Corporation/Company

48.

Recovery of dues to the Corporation/Company

49.

Commercial employment after retirement

50.

Nomination

51.

Date from which pension becomes payable

52.

Currency in which pension is payable

53.

Manner of payment of pension

54.

Power to issue instructions

54A.

Power to Relax

54B

Pensionary benefits to employee mentioned in proviso to clause (k) of paragraph 2 who was in service on or after 1.1.1996

55.

Residuary provisions

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

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APPENDICES

APPENDIX-I

Appointing Authority under Para 30

APPENDIX-II

Calculation of qualifying service of permanent part-time basis employees

APPENDIX-III

Updating of basic pension of those retired between 1.1.1986 and 31.7.1987

APPENDIX-IV

Dearness relief on basic pension

APPENDIX-V

Ordinary rate of Family Pension

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

madhurin 7/3/2009

The Principal Scheme was published vide Notification No. S.O. 585(E) dated 28th June, 1995 and subsequently amended by notification No.

S.O. NOS.

AMENDMENTS MADE IN PARAGRAPHS

475(E) dated 3rd July, 1996

2(g), (k), (l), (o), (p), Appendix I

342(E) dated 22nd April, 1997

2(p), 3, 7, 34, 35, 39 (4)(c), Appendix IV, V

461(E) dated 18th June, 1999

2(p), 35, 39, Appendix IV, V

1221(E) dated 6th December, 1999

54A inserted

590(E) dated 22nd June, 2000

2(p), 35, Appendix IV, V

775(E) dated 13th August, 2001

2(p), 54B inserted

1086(E) dated 2nd November, 2001

49 the words “the Corporation or a Company, as the case may be” substituted by “competent authority”

778(E) dated 5th July, 2004

13(a) regarding purchase of annuities from Life Insurance Companies approved by IRDA

636 (E) dated 4th May, 2005

For paras 2(g) (i) (ii) (iii) (K), 54, Appendix I (i) (ii), the words „Chairman‟ or „Managing Director‟ of the Corporation have been substituted by the words „Chairman-cum-Managing Director‟ of the Corporation.

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

madhurin 7/3/2009

GENERAL INSURANCE (EMPLOYEES’) PENSION SCHEME, 1995 General Insurance Corporation of India (Updated upto Notification dated 4th May, 2005 and Admn. Instructions dated 8.2.2006)

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

madhurin 7/3/2009

GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Economic Affairs) NOTIFICATION INSURANCE New Delhi, the 28th June, 1995 GENERAL INSURANCE (EMPLOYEES’) PENSION SCHEME, 1995

GENERAL INSURANCE (EMPLOYEES') PENSION SCHEME, 1995

madhurin 7/3/2009

The Principal Scheme was published vide Notification No. S.O. 585(E) dated 28th June, 1995 and subsequently amended by notification No.

S.O. NOS.

EFFECTIVE FROM

475(E) dated 3rd July, 1996

1.11.1993

342(E) dated 22nd April, 1997

1.11.1993

461(E) dated 18th June, 1999

1221(E) dated 6th December, 1999

6.12.1999

590(E) dated 22nd June, 2000

1.8.1997

775(E) dated 13th August, 2001

1.1.1996

1086(E) dated 2nd November, 2001

2.11.2001

778(E) dated 5th July, 2004

31.3.2004

636 (E) dated 4th May, 2005

1.2.2005

Payment of Grataity Act, 1972.

SECTION CONTENT

1 Short title, extent, application and commencement

2 Definitions

2A Continuous Service

3 Controlling authority

4 Payment of gratuity

4A Compulsory Insurance

5 Power to exempt

6 Nomination

7 Determination of the amount of gratuity

7A Inspectors

7B Powers of Inspectors

8 Recovery of gratuity

9 Penalties

10 Exemption of employer from liability in certain cases

11 Cognizance of offences

12 Protection of action taken in good faith

13 Protection of gratuity

14 Act to override other enactments, etc.

15 Power to make rules

An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto. BE it enacted by Parliament in the Twenty-third Year of Republic of India as follows :

Section: 1

Short title, extent, application and commencement.

(1) This Act may be called the Payment of Grataity Act, 1972. (2) It extends to the whole of India:

Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.

(3) It shall apply to -

(a) every factory, mine, oilfield, plantation, port and railway company;

(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;

(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, or, any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.

(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]

(4) It shall come into force on such date as the Central Government may, by notification, appoint.

Section: 2

Definitions.

In this Act, unless the context otherwise requires, - (a) "appropriate Government"' means, -

(i) in relation to an establishment

(a) belonging to, or under the control of, the Central Government, (b) having branches in more than one State,

Government,

(d) of a major port, mine, oilfield or railway company, the Central

Government,

(ii) in any other case, the State Government;

(b) "completed year of service" means continuous service for one year;

[2] [(c) "continuous service" means continuous service as defined in section

2A;]

(d) "controlling authority" means an authority appointed by the appropriate

Government under section 3 ;

(e) "employee" means any person (other than an apprentice) employed on wages, [3] [***] in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, [4] [and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity].

Explanation : [5] [***]

(f) "employer" means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop -

(i) belonging to, or under the control of, the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned,

(ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive office of the local authority,

(iii) in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person;

(g) "factory" has the meaning-assigned to it in clause (m) of section 2 of the

Factories Act, 1948 (63 of 1948);

(h) "family", in relation to an employee, shall be deemed to consist of -

(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents [6] [and the dependent parents of his wife and the widow] and children of his predeceased son, if any,

(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any:

[7] [***]

Explanation : Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family, and where a child of an employee has been adopted by another person and such adoption is, under the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee;

(i) "major port" has the meaning assigned to it in clause (8) of section 3 of the Indian Ports Act, 1908 (15 of 1908);

(j) "mine" has the meaning assigned to it in clause (J) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);

(k) "notification" means a notification published in the Official Gazette;

(l) "oilfield" has the meaning assigned to it in clause (e) of section 3 of the

Oilfields (Regulation and Development) Act, 1948 (53 of 1948);

(m) "plantation" has the meaning assigned to it in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951) ;

(n) "port" has the meaning assigned to it in clause (4) of section 3 of the

Indian Ports Act, 1908 (15 of 1908);

(o) "prescribed" means prescribed by rules made under this Act;

(p) "railway company" has the meaning assigned to it in clause (5) of section

3 of the Indian Railways Act, 1890 (9 of 1890);

(q) "retirement" means termination of the service of an employee otherwise than on superannuation;

[8] [(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment;]

(s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which arc paid or arc payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.

Section: 2A

Continuous service.

For the purposes of this Act, -

(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order [***] treating the absence as break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer -

(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -

(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and

(ii) two hundred and forty days, in any other case;

(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than -

(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and

(ii) one hundred and twenty days, in any other case;

Explanation: For the purpose of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which -

(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicab1c to the establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment and

(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.

(3) where an employee employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy- five per cent of the number of days on which the establishment was in operation during such period.

Section: 3

Controlling authority

The appropriate Government may, by notification, appoint any officer to be a controlling authority, who shall be responsible for the administration of this Act and different controlling authorities may be appointed for different areas.

Section: 4

Payment of gratuity.

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the

same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.]

Explanation. : For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he, was capable of performing before the accident or disease resulting in such disablement.

(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned:

Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account.:

Provided further that in the case of [an employee who is employed in a seasonal establishment and who is riot so employed throughout the year], the employer shall pay the gratuity at the rate of seven days wages for each season.

Explanation: In the case of a monthly rated employee, the fifteen days wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.

(3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand] rupees.

(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.

(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

(6) Notwithstanding anything contained in sub-section (1), -

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

(b) the gratuity payable to an employee may be wholly or partially forfeited]

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) if the services of such employee have been terminated for any act which

constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

(7) [***]

Section: 4A Compulsory insurance

(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:

Provided that different dates may be appointed for different establishments or class of establishments or for different areas.

(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement and every employer employing five hundred or more persons who establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).

(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).

(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity fund.

(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (1) or by way of 'contribution to all approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.

(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.

Explanation : In this section "approved gratuity fund" shall have the same meaning as in clause (5) of section 2 of the Income-tax Act, 1961 (43 of 1961)].

Section: 5

Power to exempt

(1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

(2) The appropriate. Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interests of any person.

Section: 6

Nomination.

(1) Each employee, who has completed one year of service, shall make, within such time, in such form and in such manner, as may be prescribed, nomination for the Purpose of' the second proviso to sub-section (1) of section 4.

(2) An employee may, in his nomination, distribute the amount of gratuity payable to him under this Act amongst more than one nominee.

(3) If an employee has a family at the time of' making a nomination, the nomination shall be made in favour of one or more members of his family, and any nomination made by such employee in favour of a person who is not a member of his family, shall be void.

(4) If at the time of making a nomination the employee has no family, the nomination may be made in favour of any person or persons but if the employee subsequently acquires a family, such nomination shall forthwith become invalid and the employee shall make, within such time as may be prescribed, afresh nomination in favour of one or more members of his family.

(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by an employee at any time, after giving to his employer a written notice in such form and in such manner as may be prescribed, of his intention to do so.

(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the employee who shall make a fresh nomination, in the prescribed form, in respect of such interest.

(7) Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be sent by the employee to his employer, who shall keep the same in his safe custody.

Section: 7

Determination of the amount of gratuity.

(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.

(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the

amount gratuity so determined.

(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer

shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified

by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.]

(4)

(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity.

(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the employer or employee or any other person raising the dispute may make an application to the controlling authority for deciding the dispute.]

(c)] The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer.]

(d)The controlling authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto.

(e)As soon as may be after a deposit is made under clause (a), the controlling authority shall pay the amount of the deposit -

(i) to the applicant where he is the employee; or

(ii) where the applicant is not the employee, to the nominee or, as the case may be, the guardian of such nominee or] heir of the employee if the controlling authority is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity.

(5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority shall have the same powers as are vested in a court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely :

(a) enforcing the attendance of any person or examining him on oath; (b) requiring the discovery and production of documents,

(d) issuing commissions for the examination of witnesses.

(6) Any inquiry under this section shall be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code, 1860 (45 of 1860).

(7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf:

Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days.

Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with

him an amount equal to the amount of gratuity required to be deposited under subsection (4), or deposits with the appellate authority such amount.]

(8) The appropriate Government or the appellate authority, as the case may be, may, after giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify or reverse the decision of the controlling authority.

Section: 7A

Inspectors

(1) The appropriate Government may, by notification, appoint as many

Inspectors, as it deems fit, for the purposes of this Act.

(2) The appropriate Government may, by general or special order, define the area to which the authority of an Inspector so appointed shall extend and where two or more Inspectors are appointed for the same area, also provide, by such order, for the distribution or allocation of work to be performed by them under this Act.

(3) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code, 1860 (45 of 1860).

Section: 7B

Powers of Inspectors.

(1) Subject to any rules made by the appropriate Government in this behalf, an Inspector may, for the purpose of ascertaining whether any of the provisions of this Act or the conditions, if any, of any exemption granted there under, have been complied with, exercise all or any of the following powers, namely:

(a) require an employer to furnish such information as he may consider necessary

(b) enter and inspect, at all reasonable hours, with such assistants (if any), being persons in the service of the Government or local or any public authority, as he thinks fit, any premises of or place in any factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, for the purpose of examining any register, record or notice or other document required to be kept or exhibited under this Act or the rules made there under, or otherwise kept or exhibited in relation to the employment of any person or the payment of gratuity to the employees, and require the production thereof for inspection;

(c) examine with respect to any matter relevant to any of the purposes aforesaid, the employer or any person whom he finds in such premises or place and who, he has reasonable cause to believe, is an employee employed therein;

(d) make copies of, or take extracts from, any register, record, notice or other document, as he may consider relevant, and where he has reason to believe that any offence under this Act has been committed by an employer, search and seize with such assistance as he may think fit, such register, record, notice or other document as he may consider relevant in respect of that offence;

(e) exercise such other powers as may be prescribed.

(2) Any person required to produce any register, record, notice or other document or to give any information by an Inspector under sub-section (1) shall be deemed to be legally bound to do so within the meaning of sections

175 and 176 of the Indian Penal Code 1860 (45 of 1860).

(3) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall so far as may be, apply to any search or seizure under this section as they apply to any search or seizure made under the authority of a warrant issued under section 94 of that Code.]

Section: 8

Recovery of gratuity.

If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon at such rate as the Central Government may, by notification, specify,] from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto :

Provided that the controlling authority shall, before issuing a certificate under this section, give the employer a reasonable opportunity of showing cause against the issue of such certificate:

Provided further that the amount of interest payable under this section shall, in no case exceed the amount of gratuity payable under this Act.

Section: 9

Penalties.

(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees or with both.

(2) An employer who contravenes, or makes default in complying with, any of the provisions of this Act or any rule or order made there under shall be punishable with imprisonment for a term which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both:

Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall be punishable with imprisonment for a term which shall not be less than [36] [Six months but which may extend to two years] unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition 01; a fine would meet the ends of justice.

Section: 10

Exemption of employer from liability in certain cases.

Where an employer is charged with an offence punishable under this Act, he shall be entitled, upon complaint duly made by him and on giving to the complainant not less than three clear days notice in writing of his intention to do so, to have any other person whom he charges as the actual offender brought before the court at the time appointed for hearing the charge; and if, after the commission of the offence has been proved, the employer proves to the satisfaction of the court -

(a) that he has used due diligence to enforce the execution of this Act, and

(b) that the said other person committed the offence in question without his knowledge, consent or connivance, that other person shall be convicted of the offence and shall be liable to the like punishment as if he were the employer and the employer shall be discharged from any liability under this Act in respect of such offence:

Provided that in seeking to prove as aforesaid, the employer may be examined on oath and his evidence and that of any witness whom he calls in his support shall be subject to cross examination on behalf of the person he charges as the actual offender and by the prosecutor:

Provided further that, if the person charged as the actual offender by the employer cannot be brought before the court at the time appointed for

hearing the charge, the court shall adjourn the hearing from time to time for a period not exceeding three months and if by the end of the said period the person charged as the actual offender cannot still be brought before the court, the court shall proceed to hear the charge against the employer and shall, if the offence be proved, convict the employer.

Section: 11

Cognizance of offences.

(1) No court shall take cognizance of any offence punishable under this Act save on a complaint made by or under the authority of the appropriate Government:

Provided that where the amount of gratuity has not been paid, or recovered, within six months from the expiry of the prescribed time, the appropriate Government shall authorise the controlling authority to make a complaint against the employer, whereupon the controlling authority shall, within fifteen days from the date of such authorisation, make such complaint to a Magistrate having jurisdiction to try the offence.

(2) No court inferior to that of a Metropolitan Magistrate or a Judicial

Magistrate of the first class shall try any offence punishable under this Act.

Section: 12

Protection of action taken in good faith.

No suitor other legal proceeding shall lie against the controlling authority or any other person in respect of anything which is in good faith done or intended to be done under this Act or any rule or order made there under.

Section: 13

Protection of gratuity.

No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section shall be liable to attach- ment in execution of any decree or order of any civil, revenue or criminal court.

Section: 14

Act to override other enactments, etc.

The provisions of this Act or any rule made there under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

Section: 15

Power to make rules.

(1) The appropriate Government may, by notification make rules for the purpose of carrying out the provisions of this Act.

(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session ii-immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall, thereafter, have effect only in such modified form or be of no effect as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

THE PAYMENT OF GRATUITY (AMENDMENT) BILL, 2007

Bill No. 90 of 2007

THE PAYMENT OF GRATUITY (AMENDMENT) BILL, 2007

39 of 1972.

BILL

further to amend the Payment of Gratuity Act, 1972.

BE it enacted by Parliament in the Fifty-eighth Year of the Republic of India as follows:—

1. (1) This Act may be called the Payment of Gratuity (Amendment) Act, 2007.

2. In the Payment of Gratuity Act, 1972, in section 2, for clause (e), the following clause shall be substituted, namely:—

'(e) "employee" means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment, to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;'.

Short title. Amendment of

section 2.

STATEMENT OF OBJECTS AND REASONS

2. The Central Government had extended the provisions of the Act to the educational institutions employing 10 or more persons vide this Ministry's notification No. S.O. 1080 dated 3rd April, 1997. The Hon'ble Supreme Court in its judgment dated 13th January, 2004, in Ahmedabad Private Primary Teachers Association Vs Administrative Officer [AIR 2004 (SC) 1426] held that teachers are not entitled to gratuity under the Act, in view of the fact that teachers do not answer description of "employee" who are "skilled", "semi-skilled" or "unskilled". The Supreme Court observed that non-use of wide language similar to definition of "employee" as is contained in section 2(f) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, reinforces the conclusion that teachers are not covered in that definition. Para 26 of the said judgment reads as follows:—

"Our conclusion should not be misunderstood that teachers although engaged in very noble profession of educating our young generation should not be given any gratuity benefit. There are already in several States separate statutes, rules and regulations granting gratuity benefits to teachers in educational institutions which are more or less beneficial than the gratuity benefits provided under the Act. It is for the Legislature to take cognizance of situation of such teachers in various establishments where gratuity benefits are not available and think of a separate legislation for them in this regard. That is the subject matter solely of the Legislature to consider and decide.".

3. Keeping in view the observations of the Hon'ble Supreme Court, it is proposed to widen the definition of "employee", in order to extend the benefits of gratuity to the teachers, by amending the same.

4. The Bill seeks to achieve the above objects.

NEW DELHI; OSCAR FERNANDES.

The 7th September, 2007.

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FINANCIAL MEMORANDUM

The Payment of Gratuity Act, 1972 (the Act) provides for payment of gratuity to employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop employing ten or more workers. The Bill amends the definition of "employee" in section 2(e) of the Act so that teachers shall also be entitled for payment of gratuity.

2. The responsibility for administration of the Act vests mainly in the State Governments and the liability for payment of gratuity vests in the employer. The employees of the Central Government and State Governments who are getting gratuity under any other Act or rules are not covered under the Act. However, as respects teachers employed by institutions aided by the Central Government, the liability on employers may involve expenditure from the Consolidated Fund of India. The exact expenditure to be incurred on this account cannot be estimated at this stage.

3. Apart from the above, no other expenditure of recurring or non-recurring nature from the Consolidated Fund of India is envisaged.

Definitions.

ANNEXURE

EXTRACT FROM THE PAYMENT OF GRATUITY ACT, 1972 (39 OF 1972)

* * * * *

2. In this Act, unless the context otherwise requires,—

* * * * * (e) "employee" means any person (other than an apprentice) employed on wages

in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or un-skilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;

* * * * *

SERVER3 \ BILL-2007 \ LAW \2865LAW

LOK SABHA

————

BILL

further to amend the Payment of Gratuity Act, 1972.

————

(Shri Oscar Fernandes, Minister of Labour and Employment)

MGIPMRND—4594LS(S5)—19.11.2007.