Railways pensions
From Indiapensions
The Indian Railways is a commercial department under the Central Government i.e. a department that functions on its own revenues. The Railways employ a total of 1381584 permanent employees and have a wage bill of Rs.14135.19 crores. The railways run their own pension scheme for their employees. In recent years, railways have been increasingly feeling the burden of pension payments which have been rising continuously. For example, the railways had 1191564 pensioners as of 2003-03 and a total of 51641 people retired in the same year. Realising the burden of pensions, the railways too were brought under the pension reform which commenced from January 1, 2004. New entrants to the railways are now a part of the new pension system. The employees are covered by two kinds of benefits:
- State railway provident fund. The Government does not contribute to provident fund for new employees
- Railway pension.
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State railway provident fund
The state railway provident fund (SRPF) is a defined contribution scheme that pays a lumpsum on retirement. It is governed by the State Railway Provident Fund Rules. The scheme initially involved contributions from the employees as well as the employers. However, after 1957, all new employees were a part of the pension scheme. Such employees are called pensionable employees. Those who had joined prior to 1957 and chose not to be a part of the pension scheme are called non-pensionable employees. The employer ceased to contribute towards the provident fund, for the pensionable employees. The employee however is still required to contribute towards the provident fund.
Applicability
All railway servants except those who are re-employed after final retirement from railway service are required to subscribe to the provident fund after completing one year of service or after obtaining confirmation of service, whichever is earlier. A probationer to railway services Group A and B have to subscribe from the date of appointment. In case of a person who has been transferred from the Central Government or State Government or a body corporate which is owned or controlled by the Government or an autonomous organisation, his previous provident fund accumulations (if any) shall be transferred to the Railway Provident Fund and he shall subscribe to the fund from the date of joining the railway service. A temporary railway servant who is borne on establishment or factory to which provisions of EPF&MP Act 1952 (19 of 1952) apply is eligible to subscribe to the SRPF if he has completed 6 months or less in such an establishment. Re-employed persons are also allowed to subscribe on re-employment.
Contributions
The amount of subscription payable for any month is 1/12th of monthly emoluments in the case of pensionable employees and 10% of the emoluments in the case of non pensionable employees. In addition to compulsory subscription, the employees may contribute voluntarily to SRPF at any time during the financial year. The rate of contribution should not exceed 100% of the basic pay of the employee.
The employer i.e. the Railways make a contribution at the end of each half year i.e. on 31st March and 30th September (This subscription is valid only for the non-pensionable employee). The employer also makes a special contribution towards the non-pensionable employees' accounts. The rate of contribution depends on the number of years of service.
- More than 15 years of service. In this case the contribution is calculated as one fourth of a month's pay for each completed six monthly period of service but not exceeding 16½ months pay or Rs.100,000 whichever is less.
- Less than 15 years of service. In this case the contribution is calculated at one fourth of a month's pay for each completed six months period of service but not exceeding six months pay. In the case of Group C & D staff, the controlling officer may, in certain special circumstances, allow contribution of half a month's pay for each completed six months period of service subject to a maximum of six months' pay.
Interest rate
The interest credited on members' balances is determined by the government from time to time. However no interest is paid on the special contributions to the fund.
Railways pension
The railways pension scheme was introduced on 16.11.1957 effective from 1.4.1957 vide Railway Boards letter No. F(E)50/RTI/6 dated 16.11.1957. All railway employees who entered service on and after 16.11.1957 are governed by the said pension scheme. This is essentially a defined benefit scheme funded by the railways out of their own revenues. These are recorded under operating expenses in the railway financial statement.
Applicability
At the time of introduction of the pension scheme,the option to join the scheme was also given to all those non-pensionable railway servants who were in service on 01.04.1957 or had joined railway service between 01.04.1957 and 16.11.1957. This option was open till 30.09.1959.
As a result of various improvements in the service conditions and implementation of the Pay Commission's recommendations etc. fresh options were again allowed to the staff to join the pension scheme as these improvements had bearing on the pensionary benefits. In all,12 such options were allowed.
As per the last pension option order issued under Boards letter No. PC-IV/87/ Imp/ PN1 dated 08.05.1987 (RBE 115/1987), PF beneficiaries who were in service on 1.1.1986 and those who continued to be in service on the date of issue of the said order were, however, automatically deemed to have come over to the Pension scheme unless they specifically opted to continue under the provident fund scheme. The last date for such option was 30.9.1987.
All pension option orders issued from time to time were made applicable retrospectively from the specified dates as mentioned in each order. The staffs who had retired in the intervening period but were otherwise eligible to opt for the pension scheme were, therefore, also given the option to join the pension scheme by refunding the payment of settlement dues that they had received under the provident fund scheme. Similarly, the families of the deceased employees who were eligible for these options were also allowed the option to join the pension scheme by refunding the payments they had received under the provident fund scheme.
Benefits
- Pension: Pension becomes admissible to a railway employee (temporary or permanent), with not less than 10 years of qualifying service on his quitting services on account of either abolition of post or medical invalidation or retirement on completion of 30 years qualifying service or superannuation. The amount of pension is calculated at 50% of average emoluments in all cases and is subject to a minimum of Rs.1,275 p.m. and maximum upto 50% of the highest pay in the Government i.e., Rs.30,000
- Retirement Gratuity: It is payable to a railway servant on his retirement if he has completed five years of qualifying service. The gratuity is paid at the scale of one fourth of the emoluments for each completed six months period of qualifying service. This is subject to a maximum of 33/2 times the emoluments, provided that the amount of retirement gratuity payable shall in no case exceed Rs.1 lakh.
- Death Gratuity: It is payable to the family of a railway servant in the event of his death in harness. The amount of gratuity is defined as per the salary scales. For those quitting with less than 10 years qualifying service, gratuity at a uniform rate of half month's emoluments for every completed six-months period of service is paid.
- Pension for temporary employees. Temporary employees who retire on superannuation or on being declared permanently incapacitated for further railway service by the appropriate medical authority after having rendered not less than 10 years of service are eligible for grant of superannuation or invalid pension as the case may be. Retirement gratuity and family pension in accordance with the rules is also provided to them.
- Family pension: Family pension is admissible to the widow/widower of the deceased railway employee at the rates specified from time to time. If the employee is not survived by his widow, his children receive the pension. Family pension benefits are available to the family of an employees in the following cases:
- If the employee dies while in service, provided they have rendered at least one year of service.
- If the employee dies before rendering one year of service, provided the employee was examined and declared medically fit at the time of joining the service.
- If an employee had retired and was receiving pension or compassionate allowance at the time of death.
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